Small-Cap ETFs Become Sources of Dividend Growth

Some of IJR’s holdings also have dividend aristocrats potential due to their notable dividend increase streaks. 18 issues have increased their cash dividend payment for at least 20 consecutive years, with 19 more increasing it for at least 10 years 176 have paid cash dividends for at least 10 consecutive years, with 231 paying for at least 5 consecutive years, according to S&P Dow Jones Indices.

The new ProShares Russell 2000 Dividend Growers ETF (NYSEArca: SMDV) tracks the Russell 2000 Dividend Growth Index. That index includes small-cap firms with dividend increase streaks of at least a decade. Index constituents are screened for liquidity and dividend status, then selected and equal weighted subject to a maximum sector weight of 30%, according to Russell Investments.

SMDV is overweight the utilities sector by nearly 2,000 basis points relative to the Russell 2000.

Table Courtesy: S&P Dow Jones