History Says This Is the Smartest Dividend ETF to Buy With $1,000 Right Now

In times of market decline, investors often turn to dividends, as they have historically outperformed the broader market during downturns. The Invesco S&P Ultra Dividend Revenue ETF (RDIV -0.76%) is an ETF that investors should consider for its high dividend yield and strong total return, especially when investing $1,000. The ETF focuses on the S&P 900 Dividend Revenue-Weighted Index, which excludes the top 5% of stocks by dividend yield and dividend payout ratio in each sector.

This strategy eliminates value traps and unsustainable dividends, ensuring only high-quality dividend stocks are included. The ETF's 60 holdings are re-weighted based on revenue, with no single stock occupying more than 5% of the portfolio. This approach has resulted in consistently high distribution yields and solid price returns.

Over the past year, RDIV has delivered an 18.6% total return, beating the S&P 500, and over five years, it has averaged a 12.1% annualized return, similar to the S&P 500's 12.8%. Although its 10-year return is slightly lower than the S&P 500's 15.1%, RDIV's true value lies in its ability to protect against market downturns. During the 2022 bear market, RDIV posted a 7.1% total return, compared to the S&P 500's 18.2% decline, demonstrating its effectiveness as a downside protection tool.

The current high valuation of the S&P 500 suggests that a correction or bear market may be imminent, making now an opportune time to invest in RDIV for long-term growth and protection.