U.S. lending rates are rising, and investors are holding on to $151 billion worth of dividend ETFs. Cue the sell-off?

Not so fast. Even as the Federal Reserve increased interest rates last week for the fourth time since the financial crisis, assets in ETFs that hold high dividend stocks hardly budged. So far in June, investors have pulled $26 million from the funds, the first monthly outflows in more than a year, but a drop in the bucket for the second-largest smart beta category after value.

It seems investors are bucking the conventional wisdom that rising rates mean it’s time to get rid of the dividend payers in their portfolios.

“While there are definitely some people that go in for yield, there is another dimension here, which is that people simply value stocks that pay dividends,” said Eric Balchunas, a Bloomberg Intelligence ETF analyst. “Dividend ETFs really held their own and in some cases took in money during past rate rises,” he said.

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