VanEck Splits Its Dividend Strategy in Two as Investors Shun US Tech

VanEck's new TDVX ETF excludes US stocks, offering tax-efficient dividend income and automatic reinvestment via an Irish domicile as investors rotate from US tech giants.

VanEck has launched a new dividend-focused exchange-traded fund that deliberately excludes US equities, capitalising on a marked shift in investor appetite away from American technology giants.

The VanEck Morningstar Developed Markets ex-US Dividend Leaders UCITS ETF (TDVX) began trading on the London Stock Exchange on 23 April 2026. The product follows the same index methodology as the firm's flagship TDIV fund but strips out all US stocks entirely.

The move reflects a broader rotation in global markets. The MSCI All Country World ex-USA has outperformed the S&P 500 by double-digit percentage points over the past year, and many income-seeking investors are turning away from the big US tech names that prefer to plough cash into artificial intelligence rather than dividends or buybacks.

A structural solution to a tax headache

The real catalyst for the new fund, however, lies in a quirk of TDIV's structure. That fund is domiciled in the Netherlands, which gave Dutch investors a clear advantage at launch in 2016 by allowing them to reclaim part of the withholding tax on dividends. But that same structure has prevented VanEck from introducing an accumulating share class — a feature that has become increasingly popular with investors.

Rather than re-domicile TDIV to Ireland and risk confusing existing holders, VanEck opted to create TDVX as a standalone product with an Irish domicile. Ireland offers more favourable withholding tax treatment on international securities and greater product flexibility.

VanEck product manager Dmitrii Ponomarev confirmed that switching TDIV's domicile was not an option. The result is a two-pronged strategy: income-focused investors stick with TDIV and its regular payouts, while those who prefer automatic reinvestment and tax efficiency can turn to TDVX.

How the portfolio is built

Both funds track the Morningstar Developed Markets Large Cap Dividend Leaders Screened Select Index, which selects the 100 stocks with the highest dividend yields — but subject to strict conditions. Companies must not have cut their dividend per share over five years, their forward payout ratio must stay below 75 per cent, and those with serious ESG risks or involvement in controversial products are excluded. Morningstar also checks that a high yield stems from solid fundamentals rather than a collapsed share price.

The weighting is based on the absolute cash dividend paid, not market capitalisation, which systematically favours mature, cash-rich businesses. Individual sector caps are set at 40 per cent.

Financials dominate the portfolio at roughly 32 per cent, followed by energy at nearly 18 per cent and healthcare at just over 15 per cent. The largest individual holdings include Exxon Mobil, Verizon, Pfizer, Roche and Nestlé.

Record territory for the flagship

TDIV itself is trading at €52.45, roughly 25 per cent above its June 2025 low and just shy of its 52-week high of €52.86. The fund has gained 8.5 per cent since the start of the year and now manages around €7.4 billion in assets, making it one of the largest dividend ETFs in Europe.

The fund paid out $1.98 per share in 2025, up from $1.814 the previous year, representing average dividend growth of nearly 17 per cent over three years. The last quarterly distribution of €0.21 per share was made in March 2026, and the next payout is expected in June.

The broader environment is working in VanEck's favour. Dividend funds globally attracted roughly $24 billion in net inflows during the first quarter of 2026 — the strongest opening quarter in four years. With TDIV and TDVX, the firm now covers two distinct investor profiles: those seeking regular income and those prioritising compounding and tax efficiency.