iShares Select Dividend ETF

DVY

Market cap $22.8B

Shifting from higher-risk assets to consistent income sources is a natural progression for retirees.

With markets volatile in early 2026, nearly 13 years of live results show that the WisdomTree U.S. Quality Dividend Growth Fund has delivered competitive long-term returns with a strong Sharpe ratio profile, reinforcing the case for emphasizing profitability and forward-looking earnings growth rather than simply backward-looking dividend streaks. While all five large-cap dividend growth ETFs target companies increasing payouts, their sharply different sector tilts, ranging from Technology and Communication Services to Utilities and Financials, have led to meaningfully different volatility, drawdown patterns and quality characteristics that investors must weigh when positioning for the next cycle. Strategies with heavier exposure to asset-light, high-return on equity sectors have exhibited stronger earnings growth expectations than more utility-heavy approaches, suggesting investors concerned about durability and valuation risk may want to consider a quality-focused allocation such as DGRW to navigate shifting market leadership.

Dividend stocks and defensive sectors have dramatically outperformed as investors flee AI-vulnerable and AI-spending industries, but valuations now appear stretched. Consumer staples and energy sectors trade at historically high forward P/E multiples, often exceeding the S&P 500, despite lower long-term earnings growth prospects. Materials and industrials have also become extended, with valuations reflecting significant future earnings already priced in, especially given AI infrastructure spending.

The iShares Select Dividend ETF and the Schwab U.S. Dividend Equity ETF have been hot buys to start 2026. A few high-flying stocks have been giving these ETFs a boost.

Maybe you're currently retired, or maybe you're just thinking about it.

Dividend stocks have sharply outperformed AI-related tech stocks since November 2025, reversing a multi-year trend. I see the rally in dividend ETFs like SCHD as overextended, prompting a pause in new purchases despite recent gains. AI is likely to benefit users more than makers, with sectors like banks, energy, and consumer staples positioned as early winners.

Retirees looking for a bit of relative stability and a bit of extra yield may wish to check out the broader basket of dividend-focused ETFs.

Funds investing in high -yielding stocks like Exxon Mobil, Ford, Coca-Cola and Walmart are blowing it out of the water.

The iShares Select Dividend ETF (NYSEARCA:DVY) has become a cornerstone holding for income-focused retirees seeking reliable dividend income.

Investing in dividend stocks is a portfolio allocation strategy that, frankly, hasn't worked wonders for investors in recent years (or for the better part of two decades now).