The 61% Club: VanEck’s Concentrated Dividend ETF Powers Past €7.9 Billion on Record Inflows

VanEck's TDIV ETF saw €2.1B Q1 inflows as its top-heavy dividend focus outperformed, with a new ex-US sibling fund TDVX launching.

The VanEck Morningstar Developed Markets Dividend Leaders UCITS ETF (TDIV) wears its concentration as a badge of honour. Its top 25 holdings account for 61% of the €7.9 billion portfolio – a level of top-heaviness that would make a broad global equity fund blanch. But that tight grip on the best dividend payers has paid off handsomely. In the first quarter of 2026, TDIV drew €2.1 billion in net inflows, the most of any dividend ETF listed in Europe, as a global rotation into income strategies gathered pace.

Financials dominate the fund with around 31% of assets, followed by energy at roughly 20% and healthcare at 14%. The four largest sectors together soak up more than two-thirds of the portfolio. Exxon Mobil is the single biggest bet at 5.75%, with Verizon Communications (4.77%), TotalEnergies (3.72%), Nestlé and Pfizer rounding out the top five. Among the next five sit Shell, Roche, PepsiCo, Allianz and BP – a classic income blend of oil majors, insurers, pharma and consumer staples. The energy weighting is so pronounced that four of the top ten positions are oil producers, making the ETF unusually sensitive to crude price swings.

Performance has justified the strategy. Year-to-date the fund has gained 8.68%, and over 12 months it has climbed 21.13%. On a five-year annualised basis it has returned 17.9%, comfortably beating the Morningstar Global High Dividend Yield Index (15.4%) and leaving the category peer average of 8.3% in the dust. The total return since inception in May 2016 stands at 219.49%. None of this has come at a high cost: the total expense ratio of 0.38% places TDIV in the cheapest quintile of the Global Equity Income category, whose median fee is 1.06%. Morningstar has awarded the fund its highest rating over one-, three- and five-year periods.

The index behind TDIV is no mere dividend screen. It applies three strict filters: the current dividend must not have fallen over the past five years, the payout ratio must stay below 75%, and no single stock can exceed 5% of the portfolio. The resulting basket of 100 names – all from developed markets – is weighted by total dividend paid, with sector caps at 40%. The composition is rebalanced twice a year, in June and December. Geographically, the US accounts for roughly 24% of assets, with the UK, France, Switzerland, Canada, Japan and Australia also featuring prominently – a markedly different distribution from a market-cap-weighted world index.

VanEck has capitalised on the strategy’s success by launching a sibling fund. The VanEck Morningstar Developed Markets ex-US Dividend Leaders UCITS ETF (TDVX) listed in London on 23 April 2026, following the same methodology but excluding all US equities. The decision to create a separate fund rather than alter TDIV’s structure was driven by regulatory constraints: TDIV is domiciled in the Netherlands, which gives Dutch investors a withholding-tax advantage, but prevents the addition of an accumulating share class. Moving to Ireland would have hurt existing holders, so the group opted for a standalone ex-US vehicle. TDVX offers a way to cut the concentration risk that global income funds often carry towards the US, while boosting exposure to European financials such as Zurich Insurance.

The broader backdrop is unusually supportive for dividend strategies. Global dividend payments hit a record $421 billion in the first quarter of 2026, up 6.7% year-on-year, with developed markets accounting for the bulk of the increase. TDIV itself has never missed a quarterly payout in a decade. The upcoming June distribution will coincide with the next semi-annual index reweighting, which could shift the sector mix. At a price of €52.56 on 26 May – about 1.9% below its 52-week high of €53.62, and just above its 50-day moving average of €52.36 – the fund trades with a relative calm that income investors appreciate. Its RSI of 61 and annualised volatility of around 10% are hallmarks of a value-biased dividend strategy that swings less than growth-heavy portfolios. Whether the current tilt towards energy and financials survives the June rebalance will depend on which companies have kept their dividend promises intact.