First, let’s look at some intuitive data. At the beginning of 2019, the dividend yield of the CSI Dividend Index was 4.7%. By June 27, 2025, the index had risen by 41.2%, yet the dividend yield on that day was 5.7%, higher than before.

Therefore, although short-term stock price fluctuations may cause some volatility in the index's dividend yield, over the medium to long term, the regular adjustment mechanism of the dividend index ensures that the rise of the index does not significantly lower the dividend yield.

Dividend indices are periodically adjusted based on dividend yields. For example, the CSI Dividend Index rebalances its constituents once a year. If a company's stock price rises but its dividends do not increase accordingly, its dividend yield will naturally decline, causing it to rank lower and be removed from the index, replaced by stocks with higher dividend yields. In December 2024, when the CSI Dividend Index was rebalanced, the average dividend yield of the 20 newly added stocks was 4.59%, while the average dividend yield of the removed stocks was 3.05%.

It is worth mentioning that if an index can maintain a high dividend yield while rising, investors can not only enjoy stable dividend income but also benefit from capital gains due to the increase in stock prices.

As a result, dividend investing is attracting increasing attention from investors, as it not only provides regular "income infusion" for daily expenses but also acts as a compound interest engine to help achieve wealth appreciation.