The great AI spending spree among big tech continues to crowd out buybacks and dividends, pushing income-focused investors to rethink their strategy. Their answer has been a stampede into the VanEck Morningstar Developed Markets Dividend Leaders ETF, which now commands assets of €8.1 billion — a record for a dividend fund in Europe.
The first quarter of 2026 alone saw €2.1 billion of fresh capital pour into the fund, part of a global wave of $24 billion flooding into dividend-focused products. VanEck’s offering left competitors such as the Vanguard FTSE All-World High Dividend Yield ETF eating dust. Part of the appeal lies in a mechanical selection process that rejects any stock that cut its payout over the past five years and caps the payout ratio at 75%. That discipline has generated a five-year annualised return of 17.9%, more than double the peer group average of 8.3%, earning the ETF a five-star Morningstar rating.
Yet the very success of the fund has forced a hard-handed rebalancing act. In June, as inflows swelled the portfolio, Exxon Mobil’s weight crept close to 6% of assets. The fund’s automated rules — no single holding above 5% and no sector exceeding 40% — acted without human intervention, trimming the oil giant back to the ceiling. The cosmetic reshuffle pushed Verizon Communications to the top of the holdings table at 4.64%, followed by TotalEnergies and Nestlé. The methodology weights companies not by market cap but by the absolute dollar value of dividends paid, so the biggest yielders in absolute terms naturally dominate.
Financial services now account for roughly 31–32% of the portfolio, energy for around 20% — a mix that reflects the stringent dividend‑growth requirements. The ETF charges an annual total expense ratio of just 0.38%, well below the category median of 1.06% and cheaper than the iShares STOXX Global Select Dividend 100 ETF. Distributions go out quarterly; investors received €0.81 per share in June and are expected to collect €1.65 over the next twelve months, implying a dividend yield of 3.18%. The next payout is due in September.
VanEck has capitalised on the momentum by launching a sibling fund domiciled in Ireland — the VanEck Morningstar Developed Markets ex-US Dividend Leaders ETF. Because the original fund is based in the Netherlands, it could not offer an accumulating share class. The new Irish vehicle automatically reinvests income and excludes US stocks, appealing to investors who favour compound growth and a non‑American bias. With the flagship hitting a record volume, a new Dublin wing, and a strict rulebook that will force another pruning in December, VanEck’s dividend machine shows no sign of slowing.
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