ProShares added two new ETFs to its dividend growth suite on Thursday, one focusing on U.S. technology and the other on the Russell 3000, which represents the total U.S. market.
With eight ETFs—including its flagship fund NOBL—and over $7 billion in assets under management as of November 7, 2019, ProShares’ dividend growth ETF lineup is the largest of any ETF provider. The expansion of the lineup reflects ProShares’ belief in the value of dividend growth strategies for long-term investors.
Kieran Kirwan, Senior Investment Strategist at ProShares, told ETF Trends that both TMDV and TDV focus on companies that are indeed very rare – only those companies that meet the stringent criteria of growing their dividends over an extended time make the grade for these portfolios.
“In a word, these companies embody quality, evidenced by their tendency to have strong fundamentals and histories of producing profits and growth for their shareholders,” Kirwan told ETF Trends.
Kirwan said many of the quality companies with strong fundamentals that are held in TMDV have been growing their dividend for over 40 years.
“Think about that for a moment – through thick and thin, these companies have been able to give their shareholders a raise every year,” he said. “Naturally, these companies have been able to weather market turbulence over the years and continue to grow their businesses. Well established technology companies that are held in TDV, as a group, deliver higher margins and earnings, in a segment of the market where those attributes can be hard to find.”
A total market domestic-focused product like TMDV can serve as the equity anchor of a well diversified portfolio, Kirwan said.
“TDV can be a great way to access a high growth segment of the market in a higher quality manner, which can make a big difference,” he said. “We see many investors using these products as replacements for underperforming active managers.”
ProShares S&P Technology Dividend Aristocrats ETF (Cboe BZX: TDV) is the only ETF focused on U.S. technology dividend growers—Technology Dividend Aristocrats®—that have raised their dividends for a minimum of seven consecutive years.
ProShares Russell U.S. Dividend Growers ETF (Cboe BZX: TMDV) represents the total market, and includes large-, mid- and small-cap U.S. companies. The fund follows the Russell 3000® Dividend Elite Index, which targets the best dividend growers of the Russell 3000 Index—companies that have raised their dividends for a minimum of 35 years.
ProShares Dividend Growers ETFs focus on the companies with the longest track records of dividend growth in some of the most widely tracked U.S. and international indexes. All of these ETFs are listed on the Cboe BZX Exchange. The funds are as follows:
|ProShares ETF||Ticker||Index||Market Cap|
|S&P 500 Dividend Aristocrats ETF||NOBL||S&P 500® Dividend Aristocrats® Index||U.S. large cap|
|S&P 500 MidCap 400 Dividend Aristocrats ETF||REGL||S&P MidCap 400® Dividend Aristocrats® Index||U.S. mid cap|
|Russell 2000 Dividend Growers ETF||SMDV||Russell 2000® Dividend Growth Index||U.S. small cap|
|ProShares Russell U.S. Dividend Growers ETF||TMDV||Russell 3000® Dividend Elite Index||U.S. total market|
|ProShares S&P Technology Dividend Aristocrats ETF||TDV||S&P® Technology Dividend Aristocrats® Index||U.S. technology|
|MSCI EAFE Dividend Growers ETF||EFAD||MSCI EAFE Dividend Masters Index||Developed international|
|MSCI Europe Dividend Growers ETF||EUDV||MSCI Europe Dividend Masters Index||Developed Europe|
|MSCI Emerging Markets Dividend Growers ETF||EMDV||MSCI Emerging Markets Dividend Masters Index||Emerging markets|
Michael Sapir, co-founder and CEO of ProShare Advisors, LLC, the advisor to ProShares, said consistent dividend growth may be one of the best indicators of a company’s health.
“We are committed to offering this powerful strategy across a broad array of market caps, geographies and sectors,” Sapir said.
The S&P Technology Dividend Aristocrats Index is constructed and maintained by S&P Dow Jones LLC. The S&P Technology Dividend Aristocrats Index focuses on well-established tech-related companies that have raised their dividends for a minimum of seven consecutive years. The index targets companies from the information technology sector but may also include technology-related companies in the communication services and consumer discretionary sectors, which may cover internet direct marketing retail, interactive home entertainment, and interactive media and services. Shares must be listed on a U.S. national securities exchange and meet certain liquidity and other requirements. The index contains a minimum of 25 stocks, which are equally weighted rather than weighted by market capitalization. The index is rebalanced quarterly each January, April, July and October, with an annual reconstitution during the January rebalance.
The Russell 3000 Dividend Elite Index is constructed and maintained by FTSE International Limited. The Russell 3000 Dividend Elite Index targets companies that are currently members of the Russell 3000 Index that have increased dividend payments for at least 35 consecutive years and meet certain liquidity requirements. The index contains a minimum of 40 stocks, which are equally weighted as of each quarterly rebalance date rather than weighted by market capitalization. No single sector is allowed to compose more than 30% of the index’s weight. The index is rebalanced each March, June, September and December, with an annual reconstitution during the June rebalance.
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