For investors with some savings who prefer not to concentrate all their capital in one direction, a common dilemma arises: when seeking dividend income, is it better to pick a single high-yield stock or rely on an index? To answer this, it helps to compare the dividend math of individual stocks versus an index, using the CSI Dividend Index's decade-long track record as a case study.

Not every stock can guarantee consistent dividend payments. In the A-share market, companies that sustain cash dividends over a long period are actually quite rare—some pay generously in certain years, some suspend payouts abruptly, and others have only been listed for a short time with minimal dividend history. For those looking to allocate capital, a single stock only reveals its past dividend performance; it offers little assurance about whether it will continue paying in the years ahead. The bar for "consecutive dividends" is not easy for individual stocks to clear.

The data makes this clearer: From 2016 to 2025, among 244 stocks that were once constituents of the CSI Dividend Index and have been listed for at least a decade, only 158 achieved ten consecutive years of dividends, roughly 65%, while the remaining 35% experienced interruptions at some point. In essence, betting on a single high-dividend stock leaves the certainty of annual payouts fundamentally uncertain.

Now let's look at the index approach: Between 2016 and 2025, the proportion of CSI Dividend Index constituents that implemented cash dividends in a given year remained above 90% annually, peaking at 100%. By bundling dozens of high-yield names into a single basket through a set of rules, the uncertainty of individual stocks is diversified into a broadly predictable outcome.

Chart: Share of CSI Dividend Index constituents paying cash dividends in the year (2016-2025)
Source: Wind; metric is the share of year-end constituents that actually implemented cash dividends (pre-tax payout per share > 0) in the respective year.

Therefore, for those seeking sustained and stable dividend income, rather than staking an entire position on one stock, it may be wiser to use a dividend index for a "one-basket" allocation—avoiding over-concentration in a single name, since diversification itself is a way to lower volatility and improve the overall holding experience. The dividend index selects stocks that have paid cash dividends for the past three consecutive years with the highest average dividend yields, and it rebalances regularly to swap out names with weakening payout capacity and bring in those with sounder fundamentals. This "metabolic" mechanism keeps the index's dividend soil fertile, making it more suited for long-term holding.

For investors with an allocation mindset, capturing dividend assets through index tools as a basket for pursuing consistent dividends proves far more convenient than hand-picking individual stocks one by one. E Fund's dividend index products all adopt the market's lowest management fee tier of 0.15% per annum. Investors may look into low-fee dividend products such as E Fund Dividend Low Volatility ETF (563020) (feeder funds A/C/Y: 020602/020603/027261), E Fund Dividend ETF (515180) (feeder funds A/C/Y: 009051/009052/022925), and E Fund Hang Seng Dividend Low Volatility ETF (159545) (feeder funds A/C: 021457/021458).

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