7 Dividend ETF Picks For May 2022

Dividend payers are outperforming the S&P 500 by 5% in 2022. That trend could be set to continue.

The S&P 500 (SPY) just had its worst month since March 2020, falling 8.8%, but other major indices had it worse. The Russell 2000 (IWM) was down 9.9% and the Nasdaq 100 (QQQ) declined 13.6%.

Dividend investors had a comparatively easier time of it. The Vanguard Dividend Appreciation ETF (VIG) and the Vanguard High Dividend Yield ETF (VYM) were only down 4-5% as defensive issues – utilities, dividend payers and low volatility stocks – all significantly outperformed the broader market. Consumer staples actually gained 2% in April.

May, however, is a new month. Given that we just saw a negative print for Q1 GDP growth and the Fed is widely expected to hike interest rates by 50 basis points in about a week and a half, I expect volatility to remain elevated. If Powell can manage to deliver a balanced message and deliver no surprises when he speaks, there’s a chance stocks stage a relief rally.