2 Dividend ETFs That Can Protect Your Money In A Downturn
Collect monthly income and sleep well while everyone else panics
Tech has had an incredible run. Most portfolios are heavier in it than ever. And most investors have no plan for what happens if it stalls. Everyone feels like a genus during the rally but they don’t know what to do when things eventually reverse. I do believe that we will be heading higher, BUT we just experienced huge double-digit gains over the last quarter. There will be a point where investors inevitably take profits and it drives share prices lower.
👉My portfolio is up more than 37% YTD, compared to US Stocks being up 11.4%.
I’ve piled into tech over the last year and now I think there are compelling opportunities to rotate into dividend-focused holdings as a hedge. While investors chase the next 10x-multibagger, the billions are buying companies with durable cash flows.
This article is about two specific funds that solve the possibility of a decline. By staying fully invested in quality companies while collecting real monthly income that keeps paying regardless of what the market does next, you can outperform the market.
By the end of this article, you will understand exactly how both funds work, what they hold, what they yield today, how they behaved during the last major selloff, and why I believe they belong in any portfolio that is serious about generating income without taking on reckless risk.
One fund focuses on U.S. large-cap quality stocks with a selective options overlay. The other brings international diversification and a double-digit monthly yield that most U.S. investors have never heard of. Together they cover two very different corners of the income landscape.
Fund #1 has a history of outperforming the S&P 500 during reversals..
Dividends Aren’t Sexy But They Get The Job Done
When markets run hot, dividend stocks gets ignored.
Everyone is chasing price appreciation. Why collect a 5% dividend when the index is up 20%? That logic makes sense until the run ends. And when it does, the investors who built income into their portfolios have something the pure growth investors do not: cash flow that keeps coming regardless of what the market does on any given day.
Income is the cushion that lets you stay rational when everything else gets volatile. That is its job. This is why I continue to manage my income positions over time, which pay me more than $41k annually.
The funds I want to talk about today are built for exactly this moment. They offer genuine yield and downside protection without asking you to abandon your existing portfolio. Collecting income that isn’t correlated to your time of effort is essential in today’s world.
Dividends allow you to get paid while you’re asleep. When you collect income that isn’t a direct result of your time or energy, it no longer become stressful to spend money on pleasantries.
The month I traveled to Japan, I collected $2,435 in dividends while there. This income paid for the trip and allowed me to order meals without guilt; it allowed me to book experiences without stress.
What To Look For In A Fund
Before I get into the specific funds, here are the three things I always check.
1. How is the income generated ?
Options premium, dividends from underlying holdings, or return of capital. Each one has different tax implications and different sustainability profiles. You need to know what you are actually collecting before you buy.
2. What happens to NAV over time?
High yield funds can distribute more than they earn if the management team is not disciplined. A fund paying 15% that loses 10% in NAV per year is not a 15% yield. That is a slow liquidation of your own capital. Always look at total return, not just the distribution.
3. How does it behave during drawdowns?
The whole point of adding income funds to a growth-heavy portfolio is protection. If the fund drops just as much as the Nasdaq during a selloff, it is not doing its job. Look at what happened during the April 2025 correction and how these funds held up relative to the broader market.
