Changes Coming for Dividend Aristocrats ETFs

With NOBL’s scant utilities sector exposure (just 1.86% at the end of the third quarter), the ETF should continue acquiring new assets if interest rates rise this year. After coming to market in October 2013, NOBL has rapidly managed to top $500 million in assets under management. [Dividend ETF Draws Praise]

What makes NOBL an alluring option among dividend ETFs is that even though the ETF is home to plenty of mature, old line companies, as evidenced by the 25-year dividend increase streak requirement, the ETF sports a yield of less than 2%. That implies ample room for dividend growth by the ETF’s roughly 50 holdings.

The importance of dividend growth as a driver of a portfolio’s total returns cannot be understated. From 1972 through 2012 companies that initiated or consistently raised dividends outperformed and were less volatile than the companies either did not pay, cut or kept dividends stagnant, according to Ned Davis Research.

Since the start of 2015, 18 companies have boosted dividends while one has announced a reduced or suspended payout, according to S&P.

SPDR S&P Dividend ETF