Dividend Yields Broadly Available Across S&P 500 Sectors
The current market offers a unique opportunity for investors, with superior dividend yield now broadly available across various sectors. As of October 21, 2026, nine of the 11 S&P 500 sectors provide dividend yields greater than that of the overall market, according to Table 1.
This broad availability of dividend yields is particularly notable, given the historical importance of dividend investing in wealth building. Investors can now choose from a wide universe of stocks, with many sectors offering attractive dividend yields.
Shift in Investor Preferences
After the Global Financial Crisis, investors became increasingly risk-averse, seeking safer investments with lower volatility. This led to a preference for dividend-yielding stocks, which tend to have lower volatility than the overall market.
However, as the bull market progressed, investors’ preferences shifted towards more aggressive investments. Exhibit 3 shows the equity beta of individual investors’ largest equity positions, courtesy of Bank of America Securities. The combined beta of these stocks has risen to 1.5, indicating that investors are now taking roughly twice the market risk they were willing to take 15 years ago.
It is essential to examine the interest-rate sensitivity of different sectors and equity indices to better understand the potential risks and opportunities. Exhibit 4 shows the interest-rate sensitivity of each S&P 500 economic sector and selected equity indices, based on monthly total returns over the past five years.
The results are intriguing, with growth stocks appearing more interest-rate sensitive than value stocks. Utilities, often considered bond proxies, are actually short-duration bond proxies, with less interest-rate sensitivity than the overall market.
The Russell 2000 Index, which tracks small-cap stocks, is also quite interest-rate sensitive, while the NASDAQ-100 Index is more sensitive than small caps. These findings have implications for investors seeking to balance their portfolios and manage risk.
The S&P Dividend Aristocrats Index, which tracks the performance of S&P 500 index constituents that have consistently increased dividends for at least 25 consecutive years, is one example of a dividend-focused investment strategy. By examining the performance of this index and other dividend-yielding stocks, investors can gain a better understanding of the potential benefits and risks of dividend investing.
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According to the report, the views presented are as of the date published and are for information purposes only. They should not be used or construed as investment, legal, or tax advice, or as an offer to sell, a solicitation of an offer to buy, or a recommendation to buy, sell, or hold any security, investment strategy, or market sector.
Index Methodology and Risk Definitions
Sector references use the Global Industry Classification Standard developed by MSCI Barra and Standard & Poor’s. The S&P 500 Growth Index is a market-capitalization-weighted and free-float-adjusted index. Parent index stocks are allocated into value or growth, while some are distributed between both.
Volatility measures risk using the dispersion of returns for a given investment. Lower P/E higher-yielding stocks have less interest-rate sensitivity than high P/E zero-yield stocks. This mirrors the lower interest-rate sensitivity of a 5-year coupon-bearing note compared to a 30-year zero-coupon bond.
S&P 500 and NASDAQ total returns dropped over 45% between October 31, 2007, and March 31, 2009. This marketing communication is not for public distribution in the UK, Europe, Hong Kong, Taiwan, Singapore, and Australia. It is intended only for qualified, professional, or institutional investors in those jurisdictions.
Interest-Rate Sensitivity and Portfolio Management
Investors should note that past performance is not a guarantee of future results, and each index reflects an unmanaged universe of securities without any deduction for advisory fees or other expenses.
The beta of a security or portfolio, which measures its volatility relative to an index, is an essential metric to consider when evaluating investment opportunities. By examining the beta of different sectors and equity indices, investors can gain a better understanding of the potential risks and rewards of their investments.
Janus Henderson Investors is the source of data unless otherwise indicated, and has reasonable belief to rely on information and data sourced from third parties. The company provides advisory services in the U.S. through Janus Henderson Investors US LLC, together with its participating affiliates and subsidiaries.
