Insights
Find the latest news and insights from TrueShares below.
Why Hold Cash When You Could Hold Dividends?
$11 trillion is sitting in cash in the US right now.1 Because of the short-term stability of cash, it makes sense that in a highly volatile year more people want a safer place to park their savings. In response to the tariff turmoil in April, for example, 401(k) investors scrambled to move their money around. More than half of outflows left US large-cap equities. 17% of inflows went into money markets while more than a quarter went into bonds and over half went into stable value funds.2
For the past few years, cash has been a tempting investment option with yields relatively high in the 4-5% range. Cash certainly has its benefits. Money markets are great for short-term savings goals and emergency funds because they are far less volatile than stocks in the short term and allow investors to avoid losing money in a downturn. But holding too much cash presents the risk of losing money in a different way and not meeting one’s financial goals.
For investors who are in it for the long haul, cash has historically had lower returns than stocks and bonds.3 With cash yields tied to federal interest rates, the return that cash holders have expected began to drop when the Federal Reserve started lowering interest rates last fall.3 At the same time, inflation has remained relatively high. Cash drag is the negative impact of holding cash compared to the potential performance of that cash if invested in the market, considering inflation.4
Even for the most risk-averse investors, here’s an hypothetical scenario that compared cash to the worst market investment timing, defined as investing in the market when it was at its peak value for the year: When a hypothetical $5,000 was invested annually from 1980 to 2023 in cash versus in the market during the “worst timing,” the most poorly-timed stock market investment still outperformed cash 12:1.3
But we can’t talk about stock market returns without talking about dividends. From 1930 to 2023, dividends made up 40% of the S&P 500’s total annualized return.6 Compared to cash, dividends can be great for regular income, retirement planning, and long-term growth. Compared to non-dividend paying or hyper-growth stocks, dividend-paying stocks hold up better in volatile markets.5 Historically, dividend investing aims to help lower volatility and protect against losses during market downturns, especially when the market drops more than 5%.6
It’s important for all types of investors to remember that while, yes, it has been a volatile year and, yes, there are real reasons to be concerned, there are always going to be real reasons to be concerned in any market. That’s why investors shouldn’t overlook basic investing principles, especially in times when they’re more likely to make an emotional financial decision.
TrueShares has two dividend-focused ETFs for investors looking to avoid cash drag and get back into the market on their own terms.
The Opal Dividend Income ETF (DIVZ) focuses on a concentrated portfolio of high-quality dividend payers across a range of sectors. It seeks above-average dividend yield with an emphasis on dividend growth over time. DIVZ now pays monthly distributions, which is a great feature for investors seeking regular income.
The TrueShares Active Yield ETF (ERNZ) takes a different approach for investors more interested in yield. The fund consists of 50-150 income generating securities and also aims to provide stable cash flow, lower volatility, and long-term capital appreciation. ERNZ also pays monthly distributions.
Dividend Paying Security Risk. Securities that pay high dividends as a group can fall out of favor with the market, causing these companies to underperform companies that do not pay high dividends. Dividends may also be reduced or discontinued.
- https://finance.yahoo.com/news/blackrock-ceo-investors-are-still-sitting-on-trillions-in-cash-as-they-wait-for-tariff-equilibrium-155357932.html
- https://www.cnbc.com/2025/04/15/cash-may-feel-safe-when-stocks-slide-but-it-has-risks.html
- https://www.fidelity.com/learning-center/trading-investing/how-much-cash-should-you-hold
- https://www.investopedia.com/terms/p/performance_drag.asp
- https://www.youtube.com/watch?v=ydRMDRm53Xo&ab_channel=YahooFinance
- https://www.ml.com/articles/what-dividend-stocks-can-offer.html
Thought Leadership,
Straight to Your Inbox
Disclosures
©2025, TrueShares, ©2025 TrueMark Investments, LLC. (“TrueMark”).
Before investing, carefully consider the TrueShares ETFs investment objectives, risks, charges and expenses. Specific information about TrueShares is contained in the prospectus and a summary prospectus, copies of which may be obtained by visiting www.www.true-shares.com. Read the prospectus carefully before you invest.
An investment in TrueShares is subject to numerous risks, including possible loss of principal. The ETFs are subject to the following principal risks: Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk associated with ETFs; Equity Market Risk; Management Risk; Market Capitalization Risk (Large Cap; Mid Cap, Small Cap Stock); Market Risk; New Fund Risk: The Fund is a recently organized, non-diversified management investment company with no operating history. As a result, prospective investors have no track record or history on which to base their investment decision. Additionally, the Adviser has not previously managed a registered fund, which may increase the risks of investing in the Fund.
Depositary Receipts Risk. American Depositary Receipts (“ADRs”) have risks similar to those of foreign securities (political and economic conditions, changes in the exchange rates, etc.) and entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares.
Individual investors should contact their financial advisor or broker dealer representative for more information on TrueShares ETFs.
Investment Products and Services are: NOT FDIC INSURED / MAY LOSE VALUE / NO BANK GUARANTEE.
All registered investment companies, including TrueShares, are obliged to distribute portfolio gains to shareholders at year-end regardless of performance. Trading in TrueShares ETFs will also generate tax consequences and transaction expenses. The information provided is not intended to be tax advice. Tax consequences of dividend distributions may vary by individual taxpayer.
TrueShares ETFs are bought and sold through exchange trading at market price, not Net Asset Value (NAV), and are not individually redeemed from the fund. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.
ETF shares may be bought or sold throughout the day at their market price, not their NAV, on the exchange on which they are listed. Shares of ETFs are tradable on secondary markets and may trade either at a premium or a discount to their NAV on the secondary market. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETF’s NAV. Brokerage commissions and ETF expenses will reduce returns.
Fund Intelligence Mutual Fund Industry and ETF Award shortlists and winners are comprised of individuals and firms who have submitted entries or been nominated via the online submission process, as well as through recommendations from leading market participants. Fund Intelligence Mutual Fund Industry and ETF Award judges will use the submitted application material, as well as any uploaded supplemental information, to determine which firm, individual or product they believe to be the most suitable and deserving winners for each category. Fund Intelligence Mutual Fund Industry and ETF Award judges have the discretionary power to move nominations into alternative categories that they think may be more suitable. Fund Intelligence Mutual Fund Industry and ETF Awards were decided by an independent panel of 20 judges with expertise across the asset management space.
TrueShares ETFs (the “Funds”) are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940. The fund is distributed by Paralel Distributors LLC, Member FINRA. Paralel is not affiliated with TrueMark Investments, LLC. TrueMark Investments, LLC, is the investment advisor to the Funds and receives a fee from the Funds for its services.
TrueMark Investments, LLC is the investment advisor to the Funds and receives a fee from the Funds for its services.
TrueShares ETFs are offered only to United States residents, and information on this site is intended only for such persons. Nothing on this website should be considered a solicitation to buy nor an offer to sell shares of any fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction.