Corporations have issued share buybacks and dividends to make company shares more attractive to investors. However, dividend-focused exchange traded funds are winning out the battle of shareholder value.

The PowerShares Buyback Achievers Portfolio (NYSEArca: PKW), which tracks U.S. companies that have repurchased 5% or more of shares over the past 12 months, was down 0.4% year-to-date. In contrast, the iShares Select Dividend ETF (NYSEArca: DVY), which includes stocks with consistently high dividend yields, increased 9.3% so far this year.

As buyback-heavy stocks underperform, “we think companies will shift to cash return via dividends,” BofA Merrill Lynch’s Savita Subramanian said in a note, reports Alex Rosenberg for CNBC.

The rise of the dividend investment theme may be attributed to diminished appetite for risk and falling rates.

In a year marked by heightened volatility, investors have shied away from riskier investments and turned to the relative stability of dividend-paying stocks.

Additionally, as the Federal Reserve takes on a more dovish stance and economic concerns pushed on bond yields, with benchmark yields on 10-year Treasures back below 2.0%, investors may find dividend-paying companies a more attractive alternative. For instance, DVY has a 3.21% 12-month yield.

As the Fed pushes kicks the can down the road, “dividend stocks are going to be the name of the game,” RJO Futures strategist Phillip Streible told CNBC.

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