Where this top JPMorgan income ETF is investing now
As investors turn to dividend stocks to weather the rocky market , they may also want to consider expanding beyond the United States. The JPMorgan Dividend Leaders ETF (JDIV) does just that — it has roughly 51% of its assets in U.S. stocks and the rest are spread around the globe. Like the S & P 500’s Dividend Aristocrats Index and High Dividend Index, JDIV is also outperforming the broader market. The exchange-traded fund has a total return of -1.43% year to date, as of Tuesday’s close, compared to the S & P 500 ‘s -4.33%. JDIV 1Y mountain JPMorgan Dividend Leaders ETF one-year performance JDIV was also named one of the top high-dividend ETFs for passive income in 2026 by Morningstar , which noted its “rigorous bottom-up stock selection.” The goal of the fund is to deliver a core-type market experience that has an “ever-so-slight” value tilt, unlike its peers who lean more into value, said Sam Witherow, a portfolio manager on the ETF. “Most of our clients are happy not earning greater than 100% of a market upside, but they definitely want to be protected in periods of market stress,” he said. “The way we think we can achieve that is by giving people what we call a material premium in terms of dividend income to the index.” Its benchmark index is the MSCI ACWI Index , which tracks large- and mid-cap stocks across developed and emerging markets. It has a dividend yield of 1.64%. JDIV, which launched in 2024, has a 2.28% dividend yield, per FactSet. It has a 0.47% expense ratio. Witherow also wants to deliver faster dividend growth than the broader market. Global stocks are expected to deliver 7% compound dividend growth over the next five years, which is higher than the average since it had dropped during Covid, he said. JDIV should see 8% growth during that time, he projected. “Companies are quick to cut dividends in times of a crisis, and they’re slow to raise them again,” Witherow noted. “That’s quite beneficial for us, because it means a lot of that growth runway in dividends is still ahead of us.” Insulation from AI The ETF is also steering clear of bets for or against artificial intelligence. Many in the AI space have been rocked with volatility this year. “We are overweight companies that are to some extent insulated from this kind of binary debate. We’re slightly underweight AI capex as a theme, and we’re also slightly underweight AI disruption,” Witherow said. “What we want to give people is just compounding income growth, regardless of the promise or the threat of AI,” he added. Global exposure JDIV focuses on three groups of dividend stocks, which allows it to have exposure to every single global sector. The first is stocks with the fastest growing dividends across its global universe. They make up 25% of the portfolio. “We’re looking for companies with exceptional long-run sales growth trajectories, low current payout ratios, and therefore the ability to compound dividend growth at very attractive rates over time,” Witherow said. Another 25% is in names that have a very sustainable high yield, which tend to be in classic old economy sectors like banks, commodities and telcos, he said. Then, 50% is in the middle cohorts of dividend yield and dividend growth, what he calls “compounder-type stocks.” These names have dividends in the 2% to 3% range and are companies Witherow believes will deliver high single-digit dividend growth over the long run. “These are the highest quality businesses in our portfolio — some very strong market positions, high free-cash-flow margins, very resilient balance sheets,” he said. Finding opportunities These days, Witherow sees opportunities in a number of areas, including international banks. That includes names in Singapore, Japan, the U.K. and Sweden. The starting point for international financials’ valuations and profitability has been very suppressed and the yield curve normalization is behind the U.S., he said. “We still think that’s a pretty powerful trend. We still think a lot of international banks are still under earning,” he added. “Their balance sheets are now very secure, and they’re finally now making returns on equity that are comparable with U.S. competitors.” Industrials is another area ripe with opportunity, particularly in aerospace, Witherow said. “We’ve been strong believers that we’re in this very extended cycle of excess profitability in commercial aerospace, largely prompted by the struggles the airframe suppliers have had in simply meeting global traffic demand following … Covid,” he explained. “So engine manufacturers, parts manufacturers, these companies are still in a fantastic position in terms of generating super normal profitability over the next few years.” Some industrial stocks in JDIV include international names like Trane Technologies and Ryanair , which also are available on U.S. exchanges. There are also domestic companies, such as Eaton and Emerson Electric . Lastly, while U.S. tech isn’t known for its dividends, international large-cap media and internet companies have been delivering strong dividend growth, Witherow said. More outperformance to come Witherow believes dividend payers, including JDIV, will continue to outperform this year. Fundamentals are in good shape and global earnings growth is broadening, he said. Plus, they are still trading at a hefty valuation discount, he added. In addition, dividend stocks tend to do well during heightened macroeconomic volatility and policy uncertainty, he said. “People are coming back to higher quality businesses, hard asset businesses, businesses with kind of growth engines that they can understand, they can have trust in, faith in,” he said. “That’s playing out in terms of market returns at the moment.
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