Tariff risks continue to add to market volatility in March, as investors await further clarification on looming April tariffs. Advisors and investors looking for the reliability of dividend-paying companies in a challenging environment should consider the T. Rowe Price Dividend Growth ETF (TDVG ). The fund’s active approach to companies growing their dividends could prove beneficial to portfolios.
The current administration threatened sweeping tariffs on April 2, dubbed “Liberation Day.” The WSJ reported on Sunday that previous, sector-specific tariffs would likely be postponed, while reciprocal tariffs on most of the major U.S. trading partners would go ahead. Tariff announcements and changes continue to create ongoing volatility in markets as investors parse longer-term impacts.
Dividends often prove attractive to investors during economic uncertainty, particularly when growth forecasts fall. With the Federal Reserve reducing 2025 U.S. GDP forecasts to 1.7 from a previous forecast of 2.1 in December, dividend strategies may be worth consideration this year.
Investors turn to dividend-paying companies for reliable income when markets get choppy. Companies that pay consistent dividends generally demonstrate resilience across a variety of market environments. When growth outlooks become challenged, they become a reliable source of income within portfolios. What’s more, the dividends paid may provide a level of cushion against drawdowns.
Navigate Volatile Markets With Active Strategies
In the dynamic market environment of 2025, active management could prove beneficial to portfolios. The ability to be selective about exposures by screening out underperforming stocks — or those with diminished outlooks in an evolving market environment — helps keep portfolios dynamic.
TDVG seeks long-term capital growth and dividend income. The actively managed strategy invests in large-cap dividend-paying companies, or those expected to begin paying dividends. The companies invested in are expected to demonstrate elevated dividend and earnings growth.
The management team seeks to maximize return potential by investing in dividend-paying companies when they are undervalued in markets. When selecting stocks for inclusion, the strategy considers a company’s cash flow, balance sheet strength, and dividend yields that are competitive to peers. It also seeks those companies with competitive advantages within their industry.
TDVG currently outperforms the S&P 500 — measured using the SPDR S&P 500 ETF Trust (SPY ) as proxy — year-to-date on a total returns basis as of March 21, 2025, according to Y-charts data. In 2024, the fund generated average annual returns of 13.45% as of December 31, 2024, per T. Rowe Price data. The fund carries an expense ratio of 0.50%.
For more news, information, and analysis, visit our Active ETF Channel.
