Global easing and a turbulent stock market have bolstered the appeal for dividend ETFs since the start of 2016. Though many thought that the bull market for dividend investing will end with the start of Fed policy tightening, bond yields were low in the U.S. despite the Fed lift-off in December. This was because the U.S. economic growth momentum slowed from late last year, global growth worries took an upper hand and 2016 saw the worst-ever stock market opening to a year.

Especially given the Chinese market upheaval and sharply falling oil prices, the market went into a tailspin and the risk-on trade sentiment was thumped. Needless to say, investors flocked to a dividend shelter apart from flying to safe havens. It is true dividend payouts can safeguard one’s portfolio in a bear market, ensure steady income in a low yield backdrop and make up for capital losses by providing current income to a large extent.

Below we highlight the dividend ETF winners in the latest market sell-off. However, one should not hope to see dividend ETFs offering stellar returns (YTD) when most global indices have slipped into the bear territory. Just a minimal gain or relatively lower losses can be viewed as the inherent strength of the below-mentioned dividend ETFs.

First Trust Morningstar Dividend Leaders Index Fund (FDL)

This fund follows the Morningstar Dividend Leaders Index with AUM of $972.8 million in its asset base. In total, the fund holds 97 stocks with Dogs of the Dow dominating the fund. From a sector look, consumer staples takes the top spot with about 22.4% exposure followed by utilities (21.5%), telecom (18%) and energy (11.4%) each taking a double-digit allocation in the basket.
 
However, the fund is heavy on Exxon Mobil (10.2%) while AT&T and Verizon round out the top three spots with about 9.9% and 8% exposure. Expense ratio comes in at 0.45%. The fund has gained 1.8% so far this year and added 4.82% in the last one month (as of February 16, 2016). This against the 6.9% drop in the S&P 500-based ETF SPDR S&P 500 ETF (SPY) in the year-to-date frame and 0.9% gain in the one-month period.
 
It has a dividend yield of 3.62% annually (as of February 16, 2016). The fund has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
 
iShares High Dividend ETF (HDV - ETF report)

This product provides exposure to 75 dividend stocks by tracking the Morningstar Dividend Yield Focus Index. The nine Dogs of the Dow account for more than half of the portfolio, suggesting that these dominate the returns of the fund. From a sector look, the fund is well spread out with double-digit exposure to Energy, Consumer Staples, Telecom, Health Care and IT.      

HDV is among the most popular dividend ETFs in the large cap space with AUM of about $4.4 billion. It charges 12 bps in fee per year and gained nearly 4.6% in the last one month. The fund is up 0.5% so far this year (as of February 16, 2016). This Zacks Rank #2 ETF yields 3.94% annually.

SPDR SP Dividend ETF (SDY)

SDY measures the performance of the highest dividend yielding S&P Composite 1500 constituents that have consistently increased dividends for at least 20 years. The $11.9-billion product holds a basket of 109 dividend paying stocks. From an individual holdings perspective, the fund does not allocate more than 2.11% to a particular company.

In terms of sectors, this dividend ETF is tilted toward Financials (22.7%), Industrials (16.1%) and Utilities (15.2%) while Information Technology (3.7%), Energy (3.2%) and Telecom (2.8%) are the bottom three spots. The fund charges 35 bps in fees. SDY is down 0.5% so far this year (as of February 16, 2016) and gained more than 5.7% in the last one month. The fund yields 2.71% annually (as of February 16, 2016).