There's a problem with the dividend ETFs investors have rushed into, Goldman says

A pedestrian carries an umbrella while walking in front of the New York Stock Exchange, Feb. 26, 2020.
Michael Nagle | Bloomberg | Getty Images

Investors who rushed into dividend and low-volatility exchange-traded funds following the historic coronavirus-induced sell-off could be disappointed, according to Goldman Sachs.

In a note to clients this week, the bank pointed out that ETFs aimed at giving investors exposure to dividend and reduced volatility don't rebalance fast enough to keep up with this year's wild market swings and companies cutting dividends.

This has led such ETFs to underperform the market and makes them riskier than investors think, Goldman said.