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April 01, 2020

Why Consider The Dividend Aristocrats ETF?

If you’re looking for interesting investment opportunities, you should definitely consider the Dividend Aristocrats ETF. Although all types of investment naturally carry risk, the Dividend Aristocrats represent a relatively stable choice, having maintained a long track record of consistent increases in dividends. Not only that, but they’ve been proven to generate a higher return when compared to the market as a whole over the last decade.

Over the last ten years, the Dividend Aristocrats have outperformed the remainder of the S&P 500 Index by around 0.4% each year. They have also generated greater total returns when compared to the wider market index and have lower volatility too.

For this reason, the Dividend Aristocrats offer a host of competitive advantages. They are leading the way in their own industries and have huge potential for growth in the long-term. As a result, these companies are able to increase their dividends every year with no interruptions. Many of these companies have even managed to increase their dividends year on year for half a century or longer and this makes them an excellent choice when it comes to making a reliable investment.

Which Companies Are In The Dividend Aristocrats List?

The list of Dividend Aristocrats is diversified over several market sectors including healthcare, consumer staples, materials, financials, energy, solar, real estate and IT. Some of the biggest names in the Dividend Aristocrats list include the Coca-Cola Company, Johnson & Johnson and the Colgate-Palmolive Company.

Although it’s possible to buy individual Dividend Aristocrats when you’re considering making the best investment decisions for you, you may find that ETFs are a better alternative. These are an option for any investor who would prefer to own all of the Dividend Aristocrats simultaneously.

The ProShares S&P 500 Dividend Aristocrats ETF (NOBL)

One of the best options for any investor who is keen to invest in a Dividend Aristocrats ETF is the ProShares S&P 500 Dividend Aristocrats ETF (NOBL). This major ETF tracks the Dividend Aristocrats specifically. With net assets of about $5.5 billion, NOBL also has a 4-star Morningstar rating. A major selling point for ETFs lies in their low expense ratio. NOBL’s yearly expense ratio is very reasonable at just 0.35%.

It isn’t too surprising that NOBL’s holdings list is also very diverse, with almost 60 different Dividend Aristocrats on it. NOBL stays up to date with Standard & Poor’s list additions each year, and regularly adds the latest Dividend Aristocrat stocks to its holdings list, so you can be sure of the best investment potential.

In relation to the wider market, NOBL is performing extremely well. Over the past five years, it has produced annual returns totally 11.3%, which compares with just 10.8% yearly returns in the case of the S&P 500 Index. It’s no wonder, then, that NOBL is such an appealing ETF for any investor who wants to buy an ETF directed towards dividend-growth. With an average price-to-earnings ratio of 18.5, the fund has a reasonable valuation that shows the fund holdings aren’t overvalued excessively at the moment.

Making Wise Investments

When you need a relatively stable investment that brings with it minimal risk, it makes sense to consider investing in the Dividend Aristocrats. Thanks to their long-established status and consistent dividend increases, they represent a reliable choice for both experienced investors and those who are just dipping their toes into the stock market.

If you’re looking for an effective investment solution that allows you to maximize your revenue potential, you should certainly consider a Dividend Aristocrats ETF. This type of investment product allows you to purchase all the Dividend Aristocrats shares simultaneously, saving you the time and effort of making individual stock purchases.

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