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ProShares, a US-based provider of alternative exchange-traded funds, perhaps best known for its line-up of short and leveraged products, has launched a new ETF providing exposure to the most dependable dividend-yielding constituents of the S&P 500 Index.
Listed on the NYSE Arca, the ProShares S&P 500 Aristocrats ETF (NOBL) is linked to the S&P 500 Dividend Aristocrats Index – a portfolio of stocks drawn from the S&P 500 reflecting both capital growth and dividend income characteristics.
Sponsored by S&P Dow Jones Indices, the S&P 500 Dividend Aristocrats Index is designed to measure the performance of large-cap, blue-chip companies within the S&P 500 that have followed a managed-dividends policy of consistently increasing dividends every year for at least 25 years.
To qualify for inclusion in the index, a stock must be a member of the S&P 500, have increased dividends every year for at least 25 consecutive years, and have a float-adjusted market capitalisation of at least $3 billion and an average daily value traded of at least $5 million.
The minimum number of constituent stocks is 40 and no particular GICS sector can account for more than a 30% weight in the index. Unlike indices that focus only on high dividend yields, which are typically from the financials and utilities sectors, the so-called “dividend aristocrats” are well diversified across all sectors.
The index is equal-weighted, with constituents being re-weighted every quarter. It currently contains 54 companies.
Michael Sapir, Chairman and CEO of ProShare Advisors, said: “Consistent dividend growth is considered an important indicator of a company’s financial strength. By that measure, the Aristocrats are the strongest of the strong in the S&P 500 – the companies with the best track records of increasing dividends.”
The fund has an expense ratio of 0.35%.
With the addition of this latest fund, ProShares now offers some 142 ETFs includes global fixed income, hedge strategies, geared (leveraged and inverse), and inflation and volatility ETFs.