VanEck’s Dividend Heavyweight Gets a Five-Star Nod as a New Irish Sibling Prepares for Takeoff

VanEck's TDIV ETF earns top Morningstar rating with 17.9% annualized return, low fees, and a new accumulating sister fund launching in Ireland.

The VanEck Morningstar Developed Markets Dividend Leaders UCITS ETF has been handed Morningstar’s top rating, just as the fund gears up for a packed June schedule that includes a payout, an index reshuffle, and the arrival of a thesaurising sister fund.

The five-star rating, awarded on 6 May 2026, is backed by more than just a strong track record. Morningstar also judged the fund’s investment process as “above average” and noted that its information ratio has consistently ranked among the top 10% of its peer group across all timeframes. That assessment is underpinned by a five-year annualised return of 17.9%, comfortably ahead of the category index’s 15.4% and the peer-group average of just 8.3%. The fund’s ongoing charge of 0.38% also places it in the cheapest fifth of its category, where the median fee stands at 1.06%.

The ETF closed Friday at €51.80, down roughly 2% on the week and just shy of its 50-day moving average of €52.12. The short-term wobble comes as no surprise to technical analysts: the relative strength index hit 81.6, signalling an overbought condition that has prompted a modest pullback. The 52-week high of €52.93, set in late April, is now less than 2% away. Over 12 months, however, the picture is far rosier — the fund has gained more than 22%, with the June 2025 trough of €41.78 a distant memory.

A Portfolio Built on Stability

The fund tracks the Morningstar Developed Markets Large Cap Dividend Leaders Screened Select Index through physical replication, holding 115 positions. The methodology caps individual stocks at 5% and sectors at 40% during rebalancing, while ESG screens exclude companies with severe sustainability risks, controversial weapons exposure, and tobacco producers.

Financials form the backbone of the portfolio with a 31% weighting, followed by energy at roughly 20% and healthcare. Pfizer is the largest single holding at nearly 4.7%, ahead of Roche and HSBC. The US drugmaker provided a timely boost just before the weekend, reporting adjusted first-quarter earnings per share of $0.75 — about 4% above consensus — on revenue of $14.5 billion, which also beat estimates. Excluding COVID products, Pfizer’s core business grew 7% year-on-year, and the company reaffirmed its full-year revenue guidance of $59.5 billion to $62.5 billion.

An Irish Twin Enters the Ring

VanEck has expanded its dividend franchise with the launch of the VanEck Morningstar Developed Markets ex-US Dividend Leaders UCITS ETF (TDVX), which began trading on Deutsche Börse and the London Stock Exchange on 23 April. The new fund carries the same 0.38% expense ratio as TDIV but offers a key structural difference: it is domiciled in Ireland and accumulates income rather than distributing it.

The decision to create a separate vehicle rather than convert TDIV stemmed from tax considerations. TDIV is based in the Netherlands, a structure that benefits Dutch investors but prevents the issuance of accumulating share classes. Moving the existing fund to Ireland would have disadvantaged current holders, so VanEck opted for a clean-slate approach. TDVX remains tiny compared with TDIV’s €7.5 billion in assets under management, but the division of labour is clear: one distributes, the other accumulates.

A Pivotal June Calendar

Three events converge in June for TDIV holders. The ex-dividend date falls on 4 June — a day earlier than initially flagged — with the payout scheduled for 11 June. Over the past 12 months, the fund has distributed €1.74 per share, and its average dividend growth over the last three years has been nearly 17% annually.

The half-yearly index rebalancing runs concurrently. Stocks must have paid a dividend in the preceding 12 months, kept their per-share payout above the five-year average, and maintained a forward payout ratio below 75% to remain in the index. Positions that fail any of these tests will be swapped out.

The macro backdrop adds another layer of relevance. The European Central Bank’s deposit rate sits at 2.0%, while eurozone inflation ticked up to 3.0% in April. For a fund heavily weighted toward financials and energy, that combination is neither alarming nor benign — it warrants watching.

Tailwinds from a Rotation Trade

The broader market environment is working in TDIV’s favour. Dividend-focused funds attracted roughly €24 billion in net inflows during the first quarter of 2026, the strongest quarterly showing in four years. The rotation away from US technology stocks toward capital-intensive sectors with reliable payouts has been a powerful tailwind. The MSCI All Country World ex-USA has outperformed the S&P 500 by double-digit percentage points this year, a trend that shows no sign of reversing.

For TDIV, the next few weeks will test whether the fund can sustain its momentum after a sharp rally. The overbought signal, the upcoming rebalancing, and the arrival of a sibling fund all add layers of complexity. But with Morningstar’s highest rating, a proven process, and a market that is increasingly rewarding dividend payers, the ETF enters June from a position of strength.