Stock buybacks have become an increasingly important way companies return capital to investors. ProShares Global Investment Strategist Simeon Hyman explains how the S&P 500 Buyback Aristocrats ETF (BUYB) focuses on companies that have consistently reduced their share count for at least a decade. 

Video Transcript

Stock buybacks have become an increasingly important way companies return capital to shareholders. 

BUYB, our S&P 500 Buyback Aristocrats ETF, focuses on companies that have made that commitment consistently over time. 

When a company reduces its share count, earnings per share can increase even if total corporate profits don’t change. 

Buybacks can also be more tax efficient than dividends, allowing investors to defer taxes until they sell their shares, typically at lower capital gains rates. 

And importantly, consistent buybacks are often viewed as a signal of management’s confidence in the long-term strength of the business. 

But consistency is key. 

The S&P 500 Buyback Aristocrats Index doesn’t just target companies with high recent buyback activity. It selects companies that have reduced their share count for at least ten consecutive years, including many industry-leading companies across the S&P 500. 

That sustained approach can point to several important characteristics: strong cash flows, high profitability, and disciplined capital management throughout the business cycle. 

BUYB offers exposure to this next generation of buyback-focused investing.