ProShares, a provider of alternative exchange-traded funds, has launched the S&P 500 Aristocrats ETF, the first fund that invests in the select group of S&P 500 companies that have increased their dividends for at least 25 consecutive years.
The ETF tracks the S&P 500 Dividend Aristocrats Index, which since its 2005 inception has outperformed the S&P 500 with less volatility.
"Consistent dividend growth is considered an important indicator of a company's financial strength," says Michael Sapir, chairman and chief executive of ProShare Advisors, ProShares' investment advisor. "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 S&P 500 Dividend Aristocrats Index is an equally weighted index that currently contains 54 companies. Since its inception, the index has only included S&P 500 companies that have increased regular dividend payments for at least 25 consecutive years. It is reconstituted annually in January and rebalanced in January, April, July and October.