Boomers' dividend stocks take beating as bond yields rise, with retirement income on the line — SkimNews
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- Dividend stocks in utilities, real estate, and materials are selling off as the 10-year Treasury yield trades between 5.2% and 5.3%, with Girard CIO Timothy Chubb warning that high-quality dividend payers are losing their relative yield advantage over Treasuries.
- The iShares 20+ Year Treasury ETF (TLT) pulled in over $3.2 billion in net inflows over the past month — its largest monthly inflows on record — as its yield hit the highest since 2002, per Dow Jones data.
- Ultrashort bond funds attracted a record near-$20 billion in September, per Morningstar, illustrating a split in the market between investors parking cash short and those betting the bond rout is over.
- The Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) returned negative 7.59% over the past month, with its top three sector weights being real estate (20%), consumer staples (18.5%), and utilities (14%), per Invesco data through Sept. 30.
- The WisdomTree US Quality Dividend Growth Fund (DGRW) — whose top four holdings are Nvidia, Microsoft, Apple, and Meta Platforms — was down just 0.81% over the same month, showing tech-heavy dividend-growth strategies weathered the selloff far better than high-yield plays.
- Corporate bonds now yield around 6%, up from about 5.5% a month ago, prompting Novare Capital Management's Bill Baynard to recommend intermediate-duration corporates with roughly 5-year duration to retiree clients.
- Dividend funds still gathered $5.1 billion in September and $46.2 billion year-to-date through September, per State Street Investment Management's Sept. 30 report, indicating investors are not abandoning the strategy wholesale.
Why it matters: The income math for retirees has flipped: with corporate bonds at roughly 6% yields (up from about 5.5% a month ago) and 10-year Treasuries above 5%, high-yield dividend ETFs heavy in utilities and real estate are getting crushed (SPHD down 7.59% in a month) while dividend-growth funds with tech exposure held up (DGRW down 0.81%).
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