Investors Piled Into Dividend Stocks in Q1. Here’s Why They Might Be Disappointed

Morningstar

Dan Lefkovitz

Research

9 Pages

In the first quarter of 2026, dividend ETFs—some focused on high-yielders, others on dividend-growers—attracted nearly $22 billion on a net basis, the most since the second quarter of 2022.

Key Takeaways

Dividend Flows Surged: Dividend ETFs attracted nearly $22 billion in Q1 2026 net flows, the highest total since Q2 2022.
Bonds Yield More: Morningstar’s US Core Bond Index yielded 4.5% on March 31, versus 2.3% for its US High Dividend Yield Index.
Timing Has Hurt: More than $50 billion flowed into dividend ETFs in early 2022, before dividend stocks lagged during 2023 and 2024.
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