Companies with a record of raising dividends are more attractive than usual since they issue their dividends cautiously. These dividend payers typically include higher quality companies that are more cautious when raising dividends since they would do so without stretching their balance.

Income-minded investors have also typically gravitated toward these high quality companies as firms that regularly raise dividends also tend to be confident about their ability to continue paying the dividends as the dividend increases are also calculated in line with future growth

“All of the dividend-focused strategies had relatively better performance in their worst month (October 2008) in the dataset than the broad market. Despite the fundamental factor tilt of the Dow Jones U.S. Dividend strategy, it had a marginally higher standard deviation and marginally worse performance in the crisis than the other dividend strategies,” according to Seeking Alpha.

For more on smart beta strategies, please visit our smart beta channel.

Tom Lydon’s clients own shares of SCHD.