VanEck Dividend ETF Earns Morningstar’s Above Average Rating as $24.1 Billion Inflows Fuel June Payout and Rebalance

VanEck TDIV ETF earns Morningstar 'Above Average' rating with 17.9% annualized return and 0.38% expense ratio, as dividend funds see $24.1B Q1 inflows.

The VanEck Morningstar Developed Markets Dividend Leaders UCITS ETF (TDIV) has been handed an “Above Average” investment process rating by Morningstar, following a blistering start to 2026. The accolade came as dividend-focused funds pulled in $24.1 billion globally in the first quarter — the strongest opening three-month haul in four years, according to LSEG Lipper data. TDIV itself now manages €7.5 billion in assets, underpinned by strict quality filtering and an annualized return of 17.9% over the long term, nearly double the category average of 8.3%.

The rating, published in early May, is driven by the fund’s risk-adjusted outperformance. Morningstar’s analysts flagged its gross information ratio, which has sat in the top decile of its peer group over one, three and five years. A key driver of that edge is the fund’s low expense ratio of 0.38% — easily in the cheapest fifth of the EAA Fund Global Equity Income category, where the median cost is 1.06%. VanEck’s decision to domicile TDIV in the Netherlands also provides local tax benefits for investors.

Three events converge in June

Investors are now eyeing a packed calendar for June. The ex-dividend date for the fund’s quarterly payout is set for 4 June, with market participants penciling in roughly €0.90 per share. That would bring the trailing twelve-month distribution to about €1.74, extending a dividend-growth run of nearly 17% annually over the past three years. TDIV’s largest holding, Pfizer, which accounts for almost 4.7% of the portfolio, earlier reported a strong first quarter: revenue of $14.45 billion, up 5% year-on-year, and adjusted earnings per share of $0.75 — four cents above consensus. The pharma giant reaffirmed its full-year guidance, targeting revenue between $59.5 billion and $62.5 billion and adjusted EPS of $2.80 to $3.00. Notably, sales from newly launched and acquired products surged 22% operationally, marking a clear pivot away from dependence on Comirnaty and Paxlovid.

Almost simultaneously, the underlying Morningstar index will undergo its semi-annual rebalancing. The timing coincides with a pronounced market rotation out of US technology stocks and into capital-intensive, dividend-paying sectors. Financials and energy currently account for 31% and 20% of the portfolio, respectively, and have been direct beneficiaries of that shift. The index methodology requires that any constituent must have paid a dividend in the past twelve months, maintained or grown its per-share payout over five years, and kept its forward payout ratio below 75%. ESG risk screening adds another layer of selectivity. Should dividend yields shift markedly across sectors before the rebalancing date, sector weights could change significantly.

Technical overbought, but momentum intact

Shares closed recently at €51.80, about 2% below the 52-week high of €52.93, leaving a year-to-date gain of roughly 7% and a one-year advance of nearly 19%. The relative strength index stands at 83.8, flashing an overbought signal that could tempt profit-taking ahead of the June events. Still, the positive news flow from both the portfolio and the broader dividend-investing tide continues to support the fund.

A new accumulating twin

VanEck also broadened its line-up in April with the launch of the VanEck Morningstar Developed Markets ex-US Dividend Leaders ETF (TDVX). This Irish-domiciled fund — trading on Deutsche Börse and the London Stock Exchange since 23 April — excludes US equities to reduce concentration risk. Crucially, its structure allows for automatic reinvestment of dividends, a feature TDIV cannot offer because its Dutch domicile prevents an accumulating share class. The new ETF charges the same 0.38% expense ratio and follows the same index methodology, offering investors a tax-efficient alternative for growth-oriented portfolios.