Companies with a proven track record of consistently growing their dividends over time have generally outperformed those that haven’t, with lower volatility. In fact, over the last five years ended March 31 the Russell 3000® Dividend Elite Index had a 44% total return with a 12.9% standard deviation, as compared to a 32.4% total return and 14.4% standard deviation for the Russell 3000 Total Return Index for the same time period[1].
And in this very volatile market environment, dividend-paying companies may further benefit investors seeking quality and stability. However, when seeking the most consistent dividend growers, a disciplined index-based screening process is an essential part of the equation, according to insights from global index provider FTSE Russell and ProShares ETFs.
Kieran Kirwan – Director, Investment Strategy & Senior Investment Strategist, ProShares:
“This is a time for investors to be choosy about their dividend-paying stocks, and companies that have consistently grown their dividends year-after-year through a wide range of market conditions have proven popular with investors. And in light of current market conditions, the hallmarks of consistent dividend growth – i.e., high quality, durable business models, stable earnings and solid fundamentals – have been even more in demand.”
Catherine Yoshimoto – Director of Product Management, FTSE Russell:
“The Russell 3000® Dividend Elite Index was created to capture small, mid and large-cap US stocks which have successfully increased their dividend payments over a period of 35 years. In addition to meeting screens for liquidity and dividend payment history, index constituents are rebalanced quarterly to ensure a maximum sector weight of 30%.”
For more information on the Index, go to the FTSE Russell website.
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[1] Source: FTSE Russell. Past performance is no guarantee of future results. Please the below for important legal disclosures.
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