© Volodymyr TVERDOKHLIB / Shutterstock.com
AI ETFs aren’t the only strong names in the market, and many dividend ETFs are outperforming most tech stocks so far in 2026. The WisdomTree US Total Dividend Fund (NYSEARCA:DTD) is up 10.5%, outpacing the S&P 500. There is a “soft” rotation into dividend stocks. Tech stocks are not yet buckling, but some are down 25-30% from their peaks, and it’s fair to assume that much of those gains is sitting in dividend ETFs now.
It’s a good idea to snap up more dividend ETFs before more investors take profits and more capital flows in. Inflation remains high, and Fed rate cuts look unlikely near-term, so higher-yield dividend ETFs are the most well-positioned to catch tailwinds. Here are three:
Alerian MLP ETF (AMLP)
The Alerian MLP ETF (NYSEARCA:AMLP) tracks Master Limited Partnerships (MLPs). These companies transport and store oil and are well positioned to benefit from the current state of the energy market without taking on significant risk.
Russian oil is no longer flowing directly to Europe, and most of Europe’s energy needs are now met by North American sources. Moreover, the situation in the Middle East is making North American oil pipelines even busier. That’s before you take into account the regular drawing and replenishing of strategic reserves across the U.S.
All of this is likely to keep AMLP trading higher and higher. The performance over the past couple of years has been a smooth upward ride, with generous yields that very few traditional ETFs offer today. AMLP’s yield is 7.56%, and although it carries a 1.01% expense ratio, the dividends and broader energy market trends suggest it could soar much more.
The Strait of Hormuz is closed once more, and the ceasefire looks to be breaking apart. If this does happen, the closure could last longer and get more ugly if it lasts through this winter. Everything oil-related can surge, but pipeline-related equities are better in the off chance the ceasefire sticks, because they won’t plunge if oil prices go down.
Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)
The Invesco S&P 500 High Dividend Low Volatility ETF (NYSEARCA:SPHD) hasn’t performed the best over the past few years, but there’s a lot going for it when you look at the future instead of the past. This ETF first tracks the S&P 500, then screens for high yields and low volatility. It then weights by yield and picks 50 stocks.
If you look at returns, they have been lackluster. Total returns are at just 47.4% (and yes, that includes dividend reinvestments) in the past five years, whereas the SPY got you 85% in gains.
So why chase this?
The single biggest draw here is that the SPHD holds many dividend-paying stocks at a discount. It has always done so, but now many of these discounted stocks are making a comeback, and there’s a real rotation into them. That’s why SPHD has surprisingly outperformed the SPY year to date. It is up 12.9%, with the SPY up 10.8%.
Stocks like Verizon (NYSE:VZ | VZ Price Prediction), Pfizer (NYSE:PFE), and Franklin Resources (NYSE:BEN) are showing strong signs of a sustained recovery. The expense ratio is 0.30%. It’s high-ish for a passive dividend ETF, but still a non-issue.
Amplify CWP Enhanced Dividend Income ETF (DIVO)
The Amplify CWP Enhanced Dividend Income ETF (NYSEARCA:DIVO) uses options to generate dividends, but it does so in a much more pragmatic way. The vast majority of options ETFs put their entire portfolios to work to generate income for their holders, whereas DIVO does so with only a small portion of its portfolio.
This means you get much more upside while receiving higher dividends.
DIVO aims to generate 2-3% from the stocks themselves, plus up to 4% from the options overlay. Altogether, DIVO now has a dividend yield of 6.39%. Its largest holdings are an interesting mix of industrials, financials, and tech, rather than the entire top 10 being dominated by tech, as in the S&P 500 and most options ETFs.
The expense ratio is average for an options ETF at 0.56%, and you capture far more price upside. Over the past year, DIVO is up 9.4% on price alone. Competing options ETFs like JEPI (NYSEARCA:JEPI) are up just 0.8% on price.
Contact [email protected] for any questions or corrections.