In the early innings of 2026, dividend exchange-traded funds (ETFs) are offering a rarified combo of performance as well as income. This places a spotlight on and the Franklin U.S. Dividend Booster Index ETF (XUDV) and the Franklin International Dividend Booster Index ETF (XIDV), which have both been strong performers to start the year.
Using the S&P 500 as a baseline performance metric, both funds have outperformed the broader market. XUDV is up just over 9% for the year while XIDV is up 6.11%. The former presents a viable option for investors looking to meld performance and maximize dividend distributions while limiting volatility. The latter is ideal for investors who are seeking not just income, but diversification, by looking outside of U.S. borders and into international territory.
Much of that outperformance is a byproduct of the performance from the fund’s holdings in February. Below were the top three standout performers in each fund for that month.
The Domestic Anchor: XUDV
On the domestic front, XUDV tracks the VettaFi New Frontier U.S. Dividend Select Index (NFUS). The strategy targets U.S. large-cap companies that offer a value-tilted trifecta — businesses that are essential, cash-flow positive, and dividend-focused.
The NFUS index saw dramatic outperformance in February thanks to the following holdings:
- Vertiv Holdings Co (VRT): As a critical provider for AI-driven data centers, the company was 36.9%, proving that high-dividend strategies have the ability capture large-scale secular growth.
- Edison International (EIX): A household name in utilities, Edison churned out a 20.0% return for the month.
- LyondellBasell Industries NV (LYB): As a global leader in the chemical industry, LyondellBasell returned 17.4% in February.
The International Edge: XIDV
Ongoing dollar weakness and potentially stretched valuations have been pushing more investors into international equities, which makes XIDV an enticing option. The fund tracks the VettaFi New Frontier International Dividend Select Index (NFDM), seeking to deliver high yield without the use of leverage or derivatives.
February 2026 was also a strong-performing for NFDM with a focus on international value in the following names:
- Magna International Inc (MGA): Magna is a leader in mobility technology, and surged 23.3% in February as stabilizing global supply chains fed into strength for the consumer discretionary sector.
- Keppel Ltd (BN4:SES): The Singaporean asset manager and operator returned 20.1% in February, highlighting the sector strength of industrial infrastructure.
- Infrastrutture Wireless Italiane SpA (INW): This Italian telecommunications company returned 20.0% return in February to round out the top three.
The Yield and Performance Combo
As mentioned, both funds also offer investors the potential to earn income via their quarterly dividend yields in addition to their outperformance. As of January 31, XUDV’s 30-day SEC yield is 4.55% and XIDV is 4.71%.
What makes these funds distinct from other dividend-focused ETFs is their optimization process. Because of this methodology, the VettaFi New Frontier indices are able to maximize yield while simultaneously limiting concentration risk and volatility. Furthermore, they come with competitive expense ratios — XUDV at just nine basis points and XIDV with 19 basis points.
Todd Rosenbluth, head of research at TMX VettaFi, spoke about XIDV on TV recently. To hear comments on XIDV, watch the video below.
VettaFi LLC (“VettaFi”) is the index provider for XUDV and XIDV for which it receives an index licensing fee. However, XUDV and XIDV are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of XUDV and XIDV.
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