NFUS posts mixed March performance as energy gains offset weakness in high-weight constituents

The VettaFi New Frontier U.S. Dividend Select Index (NFUS) delivered mixed results in March, with gains in energy and materials offset by weakness among several high-weight constituents. The index declined approximately 2.10% for the month, even as a number of individual stocks posted strong positive returns.

Energy and materials lead March’s upside

March’s outperformance within the index was driven largely by cyclical sectors. Of the 20 constituents that recorded positive returns, a substantial portion came from energy and materials.

Top performers included:

• LyondellBasell Industries NV (LYB): 40.06%
• Valero Energy Corp. (VLO): 20.74%
• Phillips 66 (PSX): 18.05%
• EOG Resources Inc. (EOG): 16.51%
• ConocoPhillips (COP): 16.34%

The energy sector posted an average return of 13.41%, with 10 constituents finishing the month in positive territory. Outside of cyclicals, select consumer names also contributed modest gains, including Best Buy Co. Inc. (BBY) at 3.60% and Target Corporation (TGT) at 6.51%.

Quarterly rebalance updates the index’s dividend mix

The NFUS index’s quarterly rebalance introduced changes that reflect an evolution in dividend investing toward technology-adjacent names. The additions increased exposure to semiconductor and data infrastructure firms, while exits from healthcare and industrials indicated a recalibration of the risk/income balance.

Additions

• Corebridge Financial (CRBG)
• Fidelity National Information Services (FIS)
• Lumentum Holdings Inc. (LITE)
• Micron Technology Inc. (MU)
• Seagate Technology (STX)
• The Progressive Corporation (PGR)
• Western Digital Corporation (WDC)

Removals

• Centene Corporation (CNC)
• Dow Inc. (DOW)
• Halliburton Company (HAL)
• Northern Trust Corporation (NTRS)
• Palantir Technologies Inc. (PLTR)
• PulteGroup Inc. (PHM)

Corporate actions and implications for XUDV

March also included 41 recorded corporate actions, nearly all of which were standard dividend distributions. For investors tracking the index through the Franklin International Dividend Booster Index ETF (XUDV), the article highlights three themes that may shape the outlook:

1. Sensitivity to mega-holdings: Concentrated weight distribution can materially affect overall performance, as illustrated by the drag from UPS and Kraft Heinz.
2. Tech-driven yield: The inclusion of Micron (MU) and Seagate (STX) reflects the methodology’s systematic capture of next-generation yielders that may offer growth potential alongside payouts.
3. Preserving yield: The rotation out of names such as Halliburton for financials like Progressive is described as an effort to manage volatility without sacrificing the index’s headline yield.

Index-level performance reflects concentration risk and rotation

Overall, March highlighted the evolving nature of dividend investing. While traditional energy exposure provided strong gains at the constituent level, the index’s monthly performance was ultimately influenced by concentration risk and the ongoing rotation toward tech-oriented payers.