Tag Archives: Dividend Aristocrats
Why Did Dividend Indices Underperform during the Coronavirus Sell-Off?
Over the past 20 years, the S&P 500® experienced three bear markets with drawdowns greater than 30%—the 2000-2001 Tech Bust, the 2008 Global Financial Crisis (GFC), and the ongoing coronavirus sell-off. During both the Tech Bust and the GFC, various U.S.-focused dividend indices outperformed the S&P 500. However, during the coronavirus sell-off, most dividend indices…
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S&P DJI’s Dividend Indices: The Importance of Incorporating Quality Screens
Over the last few months, the COVID-19 pandemic has taken its toll on the global economy in a way that no one could have expected. Unsurprisingly, many companies have had to reassess their dividend policy—in many cases resorting to cutting, postponing, or even suspending dividend payments. Against this background, it is beneficial to review the…
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Impact of Dividend Announcements on S&P DJI Dividend Indices
Dividend-paying companies have been in the spotlight as a direct consequence of the ongoing COVID-19 pandemic and crude oil glut crisis. A combination of strained corporate cash flows and political intervention has seen many companies cancel, cut or postpone payments globally. In this blog, we examine the potential impact of these events on the S&P…
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The Defensive Advantage
A wise man told me years ago that there are some things you can’t get if you go after them directly. If you’ve ever watched someone trying to sound interesting, you’ll realize the truth of my friend’s observation. There are plenty of interesting people out there, of course, but they achieve that status by pursuing…
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Putting Defensive Indices to the Test
In January 2019, we highlighted several indices designed to reduce the impact of large equity market drawdowns. Here we analyze the same suite of indices divided across three broad categories: defensive equity, multi-asset, and volatility. This analysis simply reviews performance since the S&P 500®’s high on Feb. 19, 2020, through the close on Friday, March…
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Multi-Asset Income Strategies in a Low Interest Rate Environment
One of the most significant characteristics of the post-financial crisis world has been the global persistence of low, or even negative, interest rates. The entire U.S. Treasury curve yielded below 1% for the first time in history on March 9, 2020, in the wake of the COVID-19 pandemic, before the long end reverted recently on…
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Profiling the “Personality” of 2 Dividend Strategies – A Factor Look: Part 2
What story is Optimal Asset Management’s Factor Allocator’s analysis trying to tell us? First, it is important to note each strategy has a factor fit quality reading above 80% (the S&P 500 High Dividend Index – 83.72% and the S&P 500 Dividend Aristocrats – 87.62%) which means the analysis of factor exposures appears useful in…
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Profiling the “Personality” of 2 Dividend Strategies – A Factor Look
How do the personalities of two dividend index portfolios look when reviewed under the “Factor Lens”? Using the Optimal Asset Management’s Factor Allocator tool, let’s review two strategies – S&P 500 Dividend Aristocrats and the S&P 500 High Dividend Index. We can identify the average factor exposures of each strategy since January 1995 by viewing…
The Case for Information Technology Dividend Growers
One of the common misconceptions in finance is that companies from the Information Technology (Tech) sector do not pay dividends. While this may have been the trend a long time ago, this has certainly not been the trend over the past 10 years. Over the past 10 years, within the Tech sector of the S&P…
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The Rising Importance of Dividends When Earnings Slow
Summary With Q3’s earnings season substantially complete, 2019 earnings for S&P 500 companies are expected to decline on a year-over-year basis. After several strong quarters last year, the first three quarters this year have seen marked earnings deceleration. Providing 1/3 of historical S&P 500 total returns, dividends could become important when the market may be…
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