Halloween may be over, but sugar investors got the real treat this year.

A global sugar deficit caused prices to rise this year, bringing the Teucrium Sugar Fund (CANE), which tracks futures tied to the sweet stuff, up more than 17% year to date. The fund has had net inflows of nearly $40 million in 2026, with about $59 million in AUM, according to ETF.com data. Weather has impacted sugar production across the globe and political factors in Brazil have exacerbated the deficit.

“Whenever we see a large crop price rise in a year, weather, the vast majority of the time, is the driver,” said Seth Goldstein, a senior equity analyst at Morningstar. Due to high global oil prices from the US-Iran conflict, Brazil is using more sugar for ethanol, which then leaves less for refined sugar products, he added.

Sugar Rush

Brazil’s recent general election and its associated currency fluctuations have also had an impact, said Jake Hanley, chief growth officer at Teucrium. Sugar prices tend to follow the Brazilian real, which has had large swings in recent months, weakening sharply after the election. Sugar farmers sell their crop in dollars, but the rest of their expenses are paid for in real. “As the real weakens relative to the dollar, [the farmer] has a higher incentive to sell that sugar right away, because he now can get more real for his dollar,” Hanley said.

But El Niño is the real price driver:

• Thailand and India, which together account for about a quarter of the world’s global sugar production, have both been suffering from droughts that have cut crop yields. India, facing a domestic sugar deficit, temporarily banned exports and started allowing sugar imports, which is a rarity for the country.
• Meanwhile, Brazil, also responsible for about a quarter of global sugar production, is “too wet,” said Hanley. Excess mud has made it hard to harvest, and while rain is good for growing sugar cane itself, as the plants get more water, the amount of extractable sugar in the plants declines.

Fickle As the Weather: Conversely, weather also helps sugar prices come down. “These high rises tend to not last too long unless you get bad weather for multiple years at a time,” said Goldstein. “If you’re buying a sugar ETF after the crop price has risen almost 20%, that gets to be a little more speculative, hoping for a further crop price increase, because I would assume that the impact from a lower harvest is already priced into the crop.”

For the last few years, investors have piled into tech stocks, hoping to benefit from the AI buildout. This year, as tech growth has slowed, investors are going more old school.

Dividend ETFs, which regularly pay out investors, have raked in nearly $51 billion so far in 2026, compared to about $30 billion in 2025 and about $21 billion the year prior, according to Morningstar data. But the reason for the flows differs between dividend growth funds and high-yield dividend funds.

“Dividend funds tend to be a little bit more value leaning, so it might be a way to diversify away from a lot of the big AI stocks and tech stocks that have been dominating markets for a while now,” said Dan Sotiroff, associate director of ETF and passive strategies research at Morningstar. He added some of these flows are simply investors swapping mutual funds for ETFs, a record trend this year. But for high-yield strategies, which often hold a lot of energy stocks, the story is about performance. “A lot of the energy companies that have been doing really well have been pushing a lot of those high dividend yield ETFs.”

A Means to a (Divid)End

October was the worst month for the Nasdaq since March 2025, with the index falling more than 5%. “This might be the first year where a lot of the market concentration isn’t necessarily working for investors anymore,” said Nick Puncer, managing director at Bahl & Gaynor. “I think an appropriate response to that is trying to identify investments that offer more evidence today that they are growing and doing it in a way that produces cash.”

Flows have gone to both high-yield and growth funds:

• The Schwab US Dividend Equity ETF (SCHD) pulled in the most by a wide margin, raking in $25 billion in net flows, according to Morningstar data.
• The Vanguard High Dividend Yield ETF (VYM) came in second, attracting $4.4 billion, followed by the First Trust Rising Dividend Achievers ETF (RDVY) with about $3.6 billion.

But the popularity is more than a movement away from tech. For dividend growth funds, increased investor attention is about both price and fundamentals, said Simeon Hyman, head of investment strategy at ProShares. “These dividend growers are selling at a substantial discount to the broader market, and that’s an unusual situation,” he said. “If you look several quarters ago, you would have seen higher year-over-year earnings growth from the S&P 500, but now you’re seeing it from the classic dividend growers as well.”

Pull Out Your Reading Glasses: Investors looking to dividend funds for diversification need to be careful to read the fine print, Puncer said. “Look at the portfolio underneath the surface, because you might be surprised that many dividend strategies out there, active or passive, might look a lot like the S&P 500, and so you’re not truly getting diversification from those,” he said. “This is maybe the first wave of a market transition where investors have a lot more choice about how they own a dividend strategy, and that’s a good thing for investors.”