Dividend yield soars to nearly 5%! Zhongzheng Dividend ETF (515080) plunges 2.42% on volume, absorbs over 600 million in the past 10 days, has the strike zone been reached?

On the afternoon of March 23, the A-share market experienced increased volatility, with the dividend sector simultaneously under pressure and pulling back. As of 2:25 PM, the CSI Dividend ETF (515080) dropped sharply by 2.42% on higher trading volume, with significantly increased market activity. However, recent fund inflows remain strong—data shows that this ETF has gained over 600 million yuan in additional holdings over the past 10 trading days.

What’s more noteworthy is that, according to the China Securities Index Company, as the price retraced, the dividend yield of the CSI Dividend Index tracked by this ETF surged to nearly 5%, a significant rise from earlier levels, reaching a multi-year high.

Analysis indicates that a dividend yield approaching 5% signifies:

First, approaching historical highs, highlighting its investment value. In the context of a declining risk-free interest rate trend, a nearly 5% dividend yield is highly attractive. For long-term investors seeking stable cash flow, current levels represent a high cost-performance zone. Historical data shows that whenever the dividend yield nears 5%, it often corresponds to a cyclical bottom in the CSI Dividend Index.

Second, funds are “buying more as prices fall,” confirming a bottoming consensus. The net inflow of over 600 million yuan in the past 10 days clearly indicates that long-term capital views this correction as a strategic opportunity to build positions. Thanks to its stable quarterly dividends (16 distributions since inception) and defensive attributes, the CSI Dividend ETF is rapidly evolving from a “selective allocation” to a “core holding” for prudent investors.

Third, the “ballast” role of dividend strategies continues to strengthen. The CSI Dividend Index, tracked by this ETF, selects 100 high-quality stocks with high cash dividend yields, at least three consecutive years of dividends, and sufficient market capitalization and liquidity, weighted by dividend yield. It is a benchmark dividend asset index in the A-share market. Amid increased market volatility, its “ballast” property becomes even more prominent.

Further analysis suggests that a dividend yield nearing 5% is an important signal for the “strike zone” of dividend strategies.

Risk warning: Funds are subject to risks; investments should be made cautiously.

Source: China Merchants Fund