Dividend Growth Investing
Consistency: What Rolling Returns Say about Dividend Aristocrats
Historically, three-year rolling returns revealed consistent outperformance from the S&P 500® Dividend Aristocrats® Index, which is composed of quality companies with at least 25 consecutive years of dividend growth.
When we chart 144 rolling return periods for the Dividend Aristocrats since its inception (May 2005), we see it consistently outperformed the S&P 500 under almost all market conditions.
In particular, the index produced excess returns over the S&P 500 during the financial crisis of 2008, in the 2011 rally and during the majority of the periods since then.
All-in-all, Dividend Aristocrats outperformed during 77% of rolling periods from May 2, 2005 – March 31, 2020, and had lower relative volatility 94% of the time.
Source: Morningstar, ProShares, May 2, 2005 – March 31, 2020. Index performance is for illustrative purposes only and does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest in an index. Past performance is not a guarantee of future results.
For illustrative purposes only. Click here for fund performance.
Rolling Returns: A More Complete Way to Show Performance
Rolling returns provide a more robust way to show performance than trailing returns. They present returns for numerous overlapping (rolling) increments, instead of quarterly and annual trailing calendar periods that only let you see points in time. Since investors rarely buy and sell strictly by a calendar, rolling returns may help investors better assess historical performance.
The takeaway |
|---|
|
Consider ProShares S&P 500 Dividend Aristocrats ETF if you're looking for a consistent history of strong risk-adjusted return for your large cap portfolio. |