While growth stocks have been getting all the attention these days, certain dividend-paying exchange-traded funds have also been providing attractive total returns. In fact, dividend stocks could enjoy some further tailwinds this year as the Federal Reserve cuts interest rates. While the two rate decreases anticipated in 2025 are fewer than the four that were initially expected, a lower-rate environment of any size tends to help dividend payers as their yields become more competitive with the Treasury market. On top of that, possible corporate tax cuts from the Trump administration could juice companies’ cash flows, which may translate into some companies initiating dividends while other increase payouts. Still, dividends are just part of a stock’s total return. The underlying equities’ prices also have the potential to move higher or lower. With that in mind, CNBC Pro screened for dividend-paying exchange-traded funds that enjoyed strong performances in 2024. The funds had a total return — share price appreciation plus reinvested dividends —of more than 20% in 2024, according to FactSet. The AB US High Dividend ETF had the highest total return at 26%. The actively-managed fund, which launched in March of 2023, has a 30-day SEC yield of 2.63% and a 0.45% expense ratio. The Alliance Bernstein managers look for companies that not only pay dividends but have the potential for long-term capital appreciation, according to the fund’s website. Its top holdings are largely tech companies, with Apple making up 7.15% of the portfolio and Nvidia another 6.87%. The Fidelity High Dividend ETF saw the second-highest total return at nearly 22%. The fund, which has a 2.82% 30-day SEC yield and 0.16% expense ratio, earned five stars and a silver rating from Morningstar. “Fidelity High Dividend ETF is an unorthodox strategy that balances high yield against high quality, a rare and attractive combination that should continue to drive strong long-term performance,” Morningstar analyst Ryan Jackson wrote in June . Its top three holdings as of late November were all tech stocks. The TBG Dividend Focus ETF saw a nearly 21% total return in 2024. It has a 3.03% 30-day SEC yield and 0.59% expense ratio, according to Morningstar. When the actively-managed fund debuted in November of 2023, portfolio manager David Bahnsen said it would focus on companies that grow their dividends. “Dividend growth speaks volumes about the financial well-being and sustainability of a company and we want nothing to do with companies whose dividend is in jeopardy,” said Bahnsen, founder and chief investment officer of The Bahnsen Group. The ETF’s top holdings as of Dec. 30 included Energy Transfer LP , IBM , Simon Property Group and Gilead Sciences , according to Morningstar. Lastly, the John Hancock U.S. High Dividend ETF and SPDR Portfolio S & P Sector Neutral Dividend ETF both had total returns just above 20%. The John Hancock ETF has a 30-day SEC yield of 2.38% and a 0.34% expense ratio, while the SPDR ETF has a 2.84% 30-day SEC yield and 0.05% expense ratio.
