Over the past 12 months, Capital Group Dividend Value (CGDV) sports one of the best returns in the Kiplinger ETF 20, our favorite exchange-traded funds. Its 33% one-year return through May beat the S&P 500 as well as 88% of its peers (funds that focus on large-cap stocks trading at value prices).
The exchange-traded fund aims to generate an above-market-average dividend yield by focusing on high-quality U.S. companies — 90% of the portfolio holdings must be stocks of companies with investment-grade credit ratings, and 90% must pay dividends. The fund currently yields 1.3%; the S&P 500, 1.1%.
The result, says fund comanager Chris Buchbinder, is an ETF that typically participates in bullish stretches — though it may not keep up with the broad market — and outperforms during sell-offs.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
“Companies that pay dividends have more consistent cash flows, a stronger financial profile and are more resilient during periods of market weakness,” he says. Each of the ETF’s five managers and a group of analysts independently run a piece of the fund’s assets. Over the past three years, the fund’s 26% annualized return beat 98% of its peers and the S&P 500.
Managers made a timely move during the 2025 tariff tantrum
During the “Liberation Day” tariff-related sell-off in April 2025, CGDV managers loaded up on semiconductor and semiconductor-related stocks that had fallen dramatically, including Nvidia (NVDA) and Applied Materials (AMAT).
Back then, Nvidia shares hit an intraday low of $87 and it now trades at more than $200. Other chip company stocks rebounded sharply, too. Over the past 12 months, the S&P 500 industry index of semiconductor and semiconductor-related stocks soared 107%.
Before last year’s sell-off, the fund had a “relatively modest” exposure to the information technology sector, says Buchbinder. (The sleeve of assets he manages had 0% in tech back then, he notes.) But now, the sector makes up 34% of the portfolio. Don’t expect that tilt to change much.
“There’s still opportunity in some of these AI semiconductor-related companies and software companies,” Buchbinder says.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.