While the stock market has recorded an incredible rally in 2023, exceeding all expectations, its journey in the second half has been rough. The excitement for AI, the concentration of stocks in a few firms and still-present inflationary pressure indicate potential bubbles.

Although inflation has cooled from its highs last year, there is still a significant risk that it could rebound due to lingering economic pressures, such as rising oil prices on geopolitical concerns. If inflation rises again and interest rates increase, the sectors that have been driving the current stock market rally might experience pullbacks. If this was not enough, U.S. banking industry is far from stable.

The labor market is also showing signs of easing. Recent reports indicate consumers’ credit card balances surpassed $1 trillion and marked a record high. Moreover, a significant portion of credit card borrowers (51%) have been unable to pay off their entire balance each month, resulting in accruing interest.

Recent economic data releases have indicated a cooling labor market, raising hopes that the Federal Reserve may decide to maintain interest rates at their current levels during its September meeting. However, the CME FedWatch Tool revealed that there is 43.6% of participants (up from 33.5% one-week ago) confident that the Fed will hike rates by 25-bp in the November meeting.

Why High-Dividend ETFs Are Good Bets

High dividend ETFs can be a good investment during times of economic uncertainty, as they provide a steady source of income regardless of market conditions. These types of stocks and ETFs typically pay out a higher percentage of their profits as dividends than other stocks, which means that they can make up for the capital losses, if there is any.

Against this backdrop, below we highlight a few high-dividend ETFs that are on sale currently. The S&P 500 is off 0.2% past month.

ETFs in Focus

iShares International Select Dividend ETF IDV

P/E: 5.41X

Yield: 7.36%

One-Month Return: negative 2.3%

Franklin International Low Volatility High Dividend Index ETF LVHI

P/E: 10.26X

Yield: 5.01%

One-Month Return: negative 0.51%

Global X SuperDividend U.S. ETF DIV

P/E: 10.91X

Yield: 7.48%

One-Month Return: negative 2.2%

First Trust Morningstar Dividend Leaders ETF FDL

P/E: 10.11X

Yield: 4.50%

One-Month Return: negative 1.7%

First Trust STOXX European Select Dividend ETF FDD

P/E: 5.26X

Yield: 6.77%

One-Month Return: negative 3.6%
First Trust Morningstar Dividend Leaders ETF (FDL): ETF Research Reports

Franklin International Low Volatility High Dividend Index ETF (LVHI): ETF Research Reports

Global X SuperDividend U.S. ETF (DIV): ETF Research Reports

iShares International Select Dividend ETF (IDV): ETF Research Reports

First Trust STOXX European Select Dividend ETF (FDD): ETF Research Reports

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