Amid persistent geopolitical uncertainty, global stocks and funds with a strategic focus on high dividends are experiencing a significant resurgence in investor interest. This expert highlights the top three stocks and funds that investors could consider to seize the opportunity.
What Happened: After two years of subdued demand, these funds are once again drawing substantial inflows, driven by a confluence of economic factors, most notably the elevated interest rates maintained by the Federal Reserve.
As highlighted by Eugenia Mykuliak, the founder and executive director at B2PRIME Group, the renewed popularity of dividend-yielding instruments was reflected in April 2025 fund flow data. The equity income ETFs recorded an impressive $4.9 billion in net flows.
Industry leaders such as the Schwab US Dividend Equity ETF (NYSE:SCHD) and Vanguard Dividend Appreciation Index Fund ETF (NYSE:VIG) have been at the forefront of this trend.
“Donald Trump‘s calls for lower rates and the Fed’s reluctance, which kept rates high, are the principal rationales here. As we know, high interest rates make bonds less attractive, prompting investors to shift towards dividend-paying stocks,” Mykuliak told Benzinga.
Mykuliak points to compelling examples citing Kroger Co. (NYSE:KR), Chevron Corp. (NYSE:CVX), and BP PLC (NYSE:BP). “C-bond dividend yields offered by companies like Kroger (~9.4% dividend yield), Chevron (4.78%), and BP (6.59%) appear to be competitive so far,” she highlighted.
This data underscores that dividend yields are currently either close to or, in many cases, significantly higher than the 10-year Treasury bond yield of 4.37%, making them a more attractive proposition for income-seeking investors.
“So current dividend yields remain competitive relative to long-term government bonds, particularly for high-quality dividend stocks,” Mykuliak states.
Furthermore, Mykuliak highlights that “geopolitical tensions (most notably, tariffs) and economic uncertainty make dividend stocks a safer investment.”
Looking ahead, the momentum for dividend stocks is expected to persist. Mykuliak reiterates, “Once again, the Fed’s stance amid overall economic uncertainty tilts toward keeping interest rates high, making dividends more attractive.”
Why It Matters: “All in all, dividend stocks are strategically positioned to benefit from 2025's macroeconomic landscape, offering higher yields than bonds and greater stability than growth stocks,” Mykuliak concludes.
She advises investors to “prioritize high-quality, diversified dividend portfolios (tapping into the ETF universe for convenience, bearing in mind, for example, SCHD, VIG) to capitalize on this trend while mitigating the known risks.”
However, she cautions investors to be aware of potential risks, including dividend cuts and the possibility of current economic uncertainty escalating into a more severe slowdown, which could potentially temper future inflows.
Price Action: Here’s how the stocks and ETFs mentioned by Mykuliak have performed.
| ETFs | One-Month Performance | YTD Performance | One-Year Performance |
| Schwab US Dividend Equity ETF (NYSE:SCHD) | 2.47% | 7.10% | 10.78% |
| Vanguard Dividend Appreciation Index Fund ETF (NYSE:VIG) | 2.18% | 7.31% | 11.03% |
| Stocks | One-Month Performance | YTD Performance | One-Year Performance |
| Kroger Co. (NYSE:KR) | -0.38% | 15.37% | 31.85% |
| Chevron Corp. (NYSE:CVX) | 8.14% | 5.54% | -1.12% |
| BP PLC (NYSE:BP) | 7.58% | 7.58% | -7.89% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were higher in premarket on Friday. The SPY was up 0.17% at $638.16, while the QQQ advanced 0.35% to $568.37, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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