Shareholder payouts are under siege. What that could mean for dividend-based ETFs (via ETFEdgeCNBC)
, down more than 20% year to dateBut there might be more to the declines than just that, Bryon Lake, head of Americas ETF distribution at J.P. Morgan Asset Management, told CNBC's"First of all, the leadership in this market has been primarily driven by mega-tech, which don't typically pay dividends, and so some of the dividend-paying companies have lagged because of that," Lake said.
Beyond that, "we're actually seeing investors looking to rotate more towards quality," he said. "They're very interested in companies that have strong balance sheets to manage their ongoing business expenses [and] pay down debt." Not all companies that fit that description pay dividends, "so, I do think there will be some differentiation" when it comes to how investors choose what to buy in the near term, Lake said.Mike Akins, founding partner of independent research platform ETF Action, urged investors to remember just how many ETFs leverage dividend payers as part of their strategies.
"There's 177 ETFs just listed in the U.S. that have 'dividend' in their name, with over $200 billion following those products," he said in the same "ETF Edge" interview. "At the end of the day, dividends can be used in a number of different ways to create very different portfolios." Even the rotation to quality can benefit some dividend ETFs, Akins said, noting that "dividend ETFs that have quality characteristics" such as the
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