These 3 Dividend ETFs Outperformed Every Market Crash Since 2000

"If you are an investor who is securing profits and is buying up dividend ETFs to weather a possible downturn instead, it's not a bad idea to look back at the past and see which ones have outperformed. Dividend ETFs like the , and have managed to hold themselves together much better during previous recessions. They could do even better in a future recession as investors pour into under-appreciated defensive assets. Investors have piled into tech stocks to the point where they constitute a plurality of their portfolios, if not the large majority. When a downturn hits the market, a rotation out of tech is likely."

"State Street Consumer Staples Select Sector SPDR ETF (XLP) The State Street Consumer Staples Select Sector SPDR ETF tracks the S&P 500 Consumer Staples Select Sector Index. It invests in companies that sell everyday necessities like food, beverages, household goods, and personal care products. Consumer staples are known to be stable, with demand being inelastic. It makes sense why XLP is more secure during downturns, as people rarely cut back on essential necessities during recessions. Even if a terrible recession hits, the companies that form the underlying index will be among the first in line to receive money from people's unemployment benefits. XLP has 40 holdings with the biggest one being at 11.64%, followed by at 9.08%, and at 7.67%. The ETF comes with a 2.66% dividend yield and a low expense ratio of 0.08%, or $8 per $10,000."

"State Street Health Care Select Sector SPDR ETF (XLV) The Health Care Select Sector SPDR ETF provides an easy way for investors to buy a basket of stocks in the U.S. health care industry. It tracks the performance of the Health Care Select Sector Index, which includes large health care companies from the S&P 500. The ETF holds these stocks in proportion to their market size (market-cap weighted) and aims to match the index's returns before"

Dividend-focused ETFs in defensive sectors can provide protection when markets turn. Consumer staples ETFs like XLP concentrate on inelastic-demand companies selling necessities, which tend to hold up during recessions. XLP’s 40 holdings include several large-weighted names, and the fund offers a 2.66% dividend yield with a 0.08% expense ratio. Health care ETFs such as XLV track large-cap health care companies and are market-cap weighted to mirror index performance. A rotation out of tech into defensive, income-producing ETFs could drive inflows into consumer staples and health care during a downturn.

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