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Dividend Aristocracy in a Global ETF


The premise of Dividend Aristocrats, those companies with lengthy track records of dividend increases, serves as the backstop for several exchange traded funds, including some well-known funds.

The SPDR S&P Dividend ETF (SDY) , one of the largest U.S. dividend ETFs by assets, tracks the S&P High Yield Dividend Aristocrats Index. That index requires dividend increase of at least 20 years for admission. Investors like the idea as evidenced by SDY’s $12.6 billion in assets under management.

The ProShares S&P 500 Aristocrats ETF (NOBL) tracks the S&P Dividend Aristocrats Index, which requires a minimum dividend increase streak of 25 years. Investors like NOBL as well as it took the ETF just five months to reach $100 million in AUM. [Dividend Aristocrats ETF Tops $100M in Assets]

Dividend Aristocrats also have a global reach in the form of the SPDR S&P Global Dividend ETF (WDIV) . WDIV will celebrate its first anniversary later this month. The ETF follows the S&P Global Dividend Aristocrats Index, which requires a minimum dividend increase of a decade.

“The index methodology aims to achieve a balance between high dividend yield and dividend sustainability and growth. It incorporates criteria on dividend payout ratio and maximum indicated dividend yield, to exclude companies whose future dividend payout may be considered potentially less sustainable. The index is weighted by indicated annual dividend yield to tilt the portfolio towards companies with higher dividend yields,” according to S&P Dow Jones Indices.

WDIV hit a new high on volume that was nearly six times the daily average Tuesday. Since its debut, the fund has gained 15%. [New Dividend ETFs With Staying Power]

Examining the ETF’s country and sector weights highlights why WDIV has been successful in terms of returns despite its anonymous status. The ETF’s largest country weight is the U.S. at 19.5%, followed by Canada at 15.8%.

Additionally, WDIV offers some exposure to the rebound in European equities with 10 European nations combining for nearly 40% of the fund’s weight. That group includes eight Eurozone members, though WDIV’s largest Europe exposure is a 9.5% allocation to the U.K.

WDIV also features a 26.4% weight to the utilities sector, a positive trait in a year which utilities have been the top performing sector. In fact, WDIV’s utilities allocation puts the fund on the higher end of dividend ETFs with utilities exposure. [Utilities Lift More Than Just Sector ETFs]

WDIV has just $20.7 million in assets, but nearly half that sum has flowed into the ETF this year. The fund charges 0.4% per year and has a dividend yield of 2.46%.

SPDR S&P Global Dividend ETF