Why Have Dividend Strategies Become the Market's "Ballast Stone" in the Current Market?

Amid ongoing volatility in the A-share market, dividend assets are once again favored by investors.

Data shows that yesterday (March 18), the entire market’s ETF funds exhibited a clear divergence: strategy style ETFs led with a net inflow of 2.359 billion yuan, followed by bond ETFs and money market ETFs with net inflows of 1.475 billion yuan and 1.315 billion yuan, respectively; industry theme ETFs experienced a net outflow of 9.554 billion yuan, and broad-based index ETFs saw a net outflow of 2.898 billion yuan.

Among strategy style ETFs, dividend indices performed particularly well. The CSI Dividend Index had a net inflow of 540 million yuan yesterday, the Dividend Low Volatility 100 Index saw a net inflow of 367 million yuan, and the Dividend Low Volatility Index had a net inflow of 328 million yuan.

As one of the first domestic ETFs tracking the CSI Dividend Index, CSI Dividend ETF (515080) received a net fund inflow of 166 million yuan yesterday. Over the past seven trading days, it has accumulated a total net inflow of 900 million yuan, with the latest fund size reaching 8.431 billion yuan.

In the current market environment, why are dividend strategies attracting capital?

According to Orient Securities, the favorable scenario for dividend styles is seen from two perspectives: on the numerator side, when market earnings expectations decline, companies with dividend styles have a relative advantage due to operational stability; on the denominator side, the rapid decline of risk-free rates often accompanies rising market risk premiums, making dividend-paying companies less sensitive to macro shocks and thus relatively advantageous.

Guojin Securities points out that dividend strategies are a cornerstone for many investors building their portfolios and an important tool for reducing overall volatility: on one hand, the valuation levels of dividend assets within A-shares are the lowest, and their volatility is relatively low; on the other hand, compared to major city second-hand residential rental yields and the 10-year government bond yield, dividend assets still offer a high cost-performance ratio. Moreover, based on the experience from October-November 2025 when dividend styles outperformed, during periods of significant market volatility and declining growth in technology stocks, style rebalancing also occurs.

CSI Dividend ETF (515080) tracks the benchmark CSI Dividend Index, which selects 100 stocks from the two markets with higher dividend yields, continuous dividends for over three years, and certain scale and liquidity. The index is weighted by dividend yield.

In other words, it is a basket of companies that can sustain and are willing to pay dividends, representing a collection of “top dividend-paying” companies in A-shares. As of the latest data, the CSI Dividend Index’s dividend yield over the past 12 months is 4.63%, while the 10-year government bond yield is approximately 1.83%.

Looking at the index’s historical performance, the CSI Dividend Index has seen a maximum annual increase of over 9%, continuously hitting new highs for the year. Even with recent fluctuations, the gain remains close to 6%, significantly outperforming indices like CSI 300 and SSE Composite Index.

Risk reminder: Funds are subject to risks; investments should be made cautiously.