The Trump bump for S&P 500 stocks is starting to slump. And investors are dialing back their risk as a result.
Many of the year's top-performing actively traded diversified ETFs so far, such as YieldMax Gold Miners Option Income Strategy, Eventide High Dividend ETF and VictoryShares Free Cash Flow ETF, are for investors looking to play it safer. All are up 2% or more this year so far, while SPDR S&P 500 ETF Trust is down 0.7%.
"After back to back years of megacap growth stocks climbing higher, investors started 2025 focused on equity income generating, high-quality companies," said Todd Rosenbluth, head of research at TMX Vetta Fi.
Searching For Income
In a world of uncertainty — worries about inflation abound — few assets offer as much of a feeling of security as gold.
And due to its unique portfolio, the $48 million-in-assets YieldMax Gold Miners Option Income ETF is holding up well. The ETF's return this year is north of 4.8%, says Morningstar Direct. The fund sells call options on the VanEck Gold Miners ETF. Doing so allows the fund to collect yield without giving up all the upside gains of gold miner stocks. "GDXY is an options overlay ETF providing enhanced income," Rosenbluth said.
The Power Of Dividends
But dividends are a more mainstream source of income. And dividend ETFs are perking up this year, too. The $72.7 million-in-assets Eventide High Dividend fund returned more than 4% this year. The ETF is stuffed with a number of high-yield energy and utility stocks.
For instance, its largest position is Williams at nearly 7% of the portfolio. The Tulsa, Okla.-based natural gas firm yields 3.3%. And that yield is just on top of a solid stock run this year. Williams sports a high RS Rating of 92.
Another approach winning this year so far is that of First Trust Rising Dividend Achievers ETF. The 1.51% yield of the $13 billion-in-assets ETF isn't all that head-turning. But the fund is focusing on stocks it thinks are most likely to boost dividends.
It, too, has a large weighting in energy stocks at 10.7% of the portfolio, says Morningstar Direct. One of its holdings is EOG Resources, a Houston-based seller of oil and natural gas.
The company's stable earnings allow it to pay a rich and steady dividend. The stock sports an EPS Rating of 85. Analysts think the company will earn more than $11 a share for the third-straight year in 2025. EOG Resources yields 2.9%.
Banking On Cash Flow
Investors, too, are paying close attention to companies with durable cash-generating power. These companies are expected throw off impressive levels of cash profit. That's somewhat inoculates investors from inflation.
Take the $1.9 billion-in-assets VictoryShares Free Cash Flow ETF. Its holdings blend high-quality technology stocks, like Qualcomm with energy plays like Chevron. Qualcomm's earnings are pretty bankable. Profit is expected to rise every year from 2023 until at least 2026. The stock sports an EPS Rating of 96. "A high free cash flow yield is a great sign of a company's financial strength and attractive valuation," Rosenbluth said.
Much hinges on inflation, though. Investors will likely continue to prize high income as long as inflation is a risk. Already, the yield on the 10-year Treasury keeps pushing to 5%.
"Bonds have declined in price making dividend-paying companies look relatively appealing for income purposes," Rosenbluth said. "Particularly those companies with stable and growing dividend payments that can hold up during market uncertainty."
Top U.S. Diversified ETFs This Year So Far
| ETF | Ticker | YTD Return % |
|---|---|---|
| YieldMax Gold Miners Opt Inc Strgy | GDXY | 4.78% |
| Eventide High Dividend | ELCV | 4.11 |
| VictoryShares Free Cash Flow | VFLO | 3.25 |
| Invesco S&P 500 GARP | SPGP | 2.90 |
| Thrivent Small-Mid Cap ESG | TSME | 2.72 |
| First Trust Rising Dividend Achiev | RDVY | 2.40 |
| Inspire 100 | BIBL | 2.25 |
| First Trust SMID Cp Rising Div Achv | SDVY | 2.09 |
| Invesco S&P 500 Pure Growth | RPG | 2.08 |
