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businessinsider.comAUG 202 min read

Morningstar flags 3 dividend ETFs that could protect investors from a stock market decline

Morningstar recommends three dividend ETFs for investors seeking stability amid market uncertainty. The firm highlights Vanguard High Dividend Yield ETF (VYM), Fidelity High Dividend ETF (FDVV), and BNY Mellon Enhanced Dividend and Income ETF (BEDY) for their strong performance and focus on steady cash flow companies. These ETFs have YTD gains of 14%, 11%, and 12% respectively, outperforming the S&P 500.

Original reporting
businessinsider.com
Published Aug 20, 2026, 1:00 PM UTC
Analysis
alphai AI DeskAI-generated
Added to alphai Aug 20, 2026, 1:25 PM UTC. Informational, not investment advice.
How this was made
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Morningstar flags 3 dividend ETFs that could protect investors from a stock market decline — source image
Source · businessinsider.com
Decision brief

The 30-second read

Med
01

Why it matters

The recommendation could drive new inflows into the highlighted ETFs, modestly supporting their prices.

02

Market read

The article introduces fresh ETF recommendations that may influence income-focused investors' allocation decisions.

03

What to watch

Potential tax implications of dividend distributions and the impact of rising interest rates on dividend yields.

Relevance 5/10Novelty 6/10Timing: today

Background

Morningstar's client note recommends three dividend ETFs as a hedge against a potential market decline.

Market effects

Sector

Highlights growing interest in dividend-paying equities and ETFs as a defensive play.

Regional

U.S. investors may shift allocation toward high-yield sectors.

Global

Reinforces a broader trend of income-focused strategies amid market volatility.

Counterpoint

What could challenge this read

Some investors may prefer growth ETFs despite volatility, arguing dividend ETFs underperform in strong bull markets.

Key entities

  • Research Firm
    Morningstar

    Provider of the dividend ETF recommendations.

  • Asset Manager
    Vanguard

    Issuer of VYM.

  • Asset Manager
    Fidelity

    Issuer of FDVV.

  • Asset Manager
    BNY Mellon

    Issuer of BEDY.

Read at source← All news

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