Investors looking to strike a balance between offense and defense in this market should turn to companies that consistently grow their dividends, according to Jeremy Zirin, head of UBS Asset Management’s private client U.S. equity team. When stocks slid in April following President Donald Trump ‘s tariff policy announcement, investors scooped up dividend stocks — mainly focusing on those with high yields, he said. Yet the markets rebounded as the president began easing back on tariffs amid negotiations, and on Monday stocks soared after the U.S. and China agreed to temporarily cut duties . “The higher-dividend-yielding strategies tend to do better when markets are in real turmoil and declining, but if there’s more chop, more volatility and potentially upside … you don’t want to be overly defensive,” said Zirin, who manages the UBS U.S. Dividend Ruler Fund (DVRUX) , rated five stars by Morningstar. DVRUX YTD mountain UBS U.S. Dividend Ruler Fund The fund focuses on companies with long-term track records of consistent dividend growth, as well as those that pay a dividend yield at or above that of the S & P 500 . The broad market index currently yields about 1.3%, while the UBS U.S. Dividend Ruler Fund yields 1.83%. The fund has a net expense ratio of 0.5%. In fact, research suggests those companies that consistently increase their dividends deliver better risk-adjusted returns than the highest yielding stocks, he said. Plus, dividend growers are also a good hedge against inflation, Zirin added. Two standout sectors Even within dividend-growth stocks, there are two sectors that stand out to Zirin. “The unsung heroes of the dividend growth universe are in the technology and in the financial sectors,” he said. While it is easy to find good, consistent dividend payers in areas like consumer staples and health care, tech and financials will add more balance to the dividend portfolio, he said. The UBS U.S. Dividend Ruler Fund has more than 29% of its allocation in information technology stocks and nearly 19% in financials. “Tech and financials have among the best earnings momentum and forward-looking fundamentals that we see in the market today,” said Zirin. First-quarter earnings results show that companies in the technology sector, and particularly those related to artificial-intelligence infrastructure, have been resilient, he said. The results “reinforced the notion that even during periods like the current period of economic uncertainty, hyperscalers and mega-cap tech companies are going to continue to spend and spend aggressively on their AI infrastructure,” he said. Meanwhile, the financial sector will benefit from the next wave of policy changes, which will be deregulation, Zirin said. “The administration is going to want to pivot and pivot soon to try to take the focus off of the potential impact of tariffs on the economy and to other areas of policy changes — specifically, you know, tax reform and extension of the TCJA [Tax Cuts and Jobs Act] and on deregulation,” he said. Financials also don’t have direct exposure to tariffs, he added. Here are the top 10 holdings in the UBS U.S. Dividend Ruler Fund, which include Microsoft, Oracle and JPMorgan. Microsoft holds the top position and has a 0.74% dividend yield. The company, which has been paying dividends for more than 20 years, announced its latest increase in September. In April, the tech giant posted an earnings and revenue beat and issued strong guidance. Shares are up about 6% year to date. Meanwhile, Oracle missed on the top and bottom lines for its fiscal third quarter , but the company said it has seen booming demand for computing power to support AI projects. “We are on schedule to double our data center capacity this calendar year,” Oracle Chair Larry Ellison said in a release. “Customer demand is at record levels.” Oracle also raised its dividend by 25%. It now yields about 1.3%. “Some investors look at tech dividend yields and think that they’re not all that attractive because they’re close to market yields, but if they’re growing their dividend at 25%, that dividend yield gets a lot more interesting post the dividend increase,” Zirin said. The stock has lost 6% so far this year. Lastly, JPMorgan has a dividend yield of roughly 2.2%. Zirin called it one of the best-run financial companies. In April, the bank reported revenue that topped Wall Street’s expectations. Earlier this year, JPMorgan also raised its dividend by 12% “despite all of the uncertainty and despite [CEO] Jamie Dimon’s pretty cautious forward-looking view that’s been persistent over the past two or three years,” he said. The stock has gained 8% year to date.
