Dividend Leaders Index outperforms US Market Index in 2025, boosted by high-yielding stocks
From Morningstar: 2025-06-23 08:34:00
The Morningstar Dividend Leaders Index has surged in 2025, climbing 6.5% year to date, outperforming the Morningstar US Market Index. The index, consisting of 100 high-yielding stocks, rose 9.0% in Q1 but has slipped 2.3% in the current quarter. Dividend strategies have boosted returns due to sector return trends and index structure.
Tech stocks have faltered in 2025, hindering the US Market Index with a 30.9% weight in the technology sector. Meanwhile, the utilities sector has excelled, making up 6.1% of the Dividend Composite Index and 13.1% of the Dividend Leaders Index. Apple has been a major detractor from the US Market Index but has minimal impact on the Dividend Leaders Index.
The Dividend Leaders Index is heavily influenced by its top holdings, with the five largest stocks contributing over 53% of the index’s weight. Standout performers like Philip Morris, IBM, and CVS Health have significantly boosted the index’s performance in 2025. Individual securities play a crucial role in the index’s outperformance compared to other dividend indexes. 1. The unemployment rate in the U.S. has dropped to 5.4% in August, the lowest since the start of the pandemic. The economy added 235,000 jobs, exceeding expectations.
2. Pfizer has announced that their COVID-19 vaccine is safe and effective for children aged 5 to 11. The vaccine reduced the risk of infection by 91% in trials.
3. The United Nations reports that global carbon dioxide emissions have reached their highest level in history, increasing by 6% in 2021. This raises concerns about meeting climate goals.
4. Facebook has revealed a data breach affecting 50 million users. The breach allowed hackers to access personal information, including email addresses and phone numbers.
5. The U.S. has announced a plan to donate an additional 500 million COVID-19 vaccine doses to developing countries. This is part of an effort to combat global vaccine inequality.
Read more at Morningstar: The US Dividend Stocks Outpacing the Market in 2025