Global Investors Flock to Dividend-Paying Stocks Amid Economic Uncertainties

Global funds investing in dividend-paying stocks are experiencing significant inflows this year, reversing two years of weak investor demand. Investors are seeking stable income amid geopolitical and economic uncertainties. The popularity of higher dividend-yielding stocks has risen as the technology sector, last year’s top performer, falls behind dividend-heavy sectors like utilities and energy in 2025.

Global dividend-focused exchange-traded funds (ETFs) attracted $23.7 billion in inflows during the first half of 2025, the highest in three years, according to Lipper data from LSEG. Consistent dividend growth indicates disciplined capital allocation and confidence in future business prospects. With ongoing tariff negotiations expected to cause market volatility, dividend-paying companies offer portfolio stability.

Energy leads in global dividend yield at 4.75%, followed by real estate at 3.7%, utilities at 3.3%, and financials at 3%. Europe has the highest regional dividend yield at 3%, while Asia-Pacific stands at 2.6% and the U.S. at 1.4%. As policymakers are expected to cut rates later in the year, bond coupons may decrease, while many companies can maintain or increase their dividends, favoring equities for income.

The iShares International Select Dividend ETF has gained nearly 26% this year, while the Xtrackers MSCI EAFE High Dividend Yield Equity ETF and the Schwab International Dividend Equity ETF are up around 18% each. In comparison, the MSCI World Index has returned 8.5% year-to-date.