The growth of smart-beta investing has translated into tremendous growth for both the index and ETF segments of the financial community. While we are not here to debate or dissect the basis of smart-beta strategies, the collective investment norm of smart beta has been established—factors and various other fundamental metrics are used to tilt, alter and skew a benchmark to generate a slightly different risk/return profile. Nasdaq, alongside other index providers, has jumped on the smart-beta wave in exploring the various technical and fundamental metrics used to create these enhanced strategies. In light of this, it is worth revisiting one of the simpler facets of smart beta: dividends.
Dividend As A Performance Driver
Dividend-focused indexes have demonstrated out-performance versus broad market benchmarks. While there are many different strategies to access the dividend market, the focus for this piece will be on the Nasdaq Dividend AchieversTM methodology.
The Dividend Achievers methodology screens out a broad index of companies that have increased dividends for a minimum of 10 consecutive years. This relatively uncomplicated methodology results in outperformance while still maintaining high degrees of correlation and beta to the broad market. We believe this to be one of the main tenets of deploying a strategy as smart beta—making sure there is market beta in the first place. Read the full article, published in Forbes here.
To learn more about the Nasdaq Dividend Achievers or any of our 40,000+ indexes, click here and one of our Nasdaq Global Indexes representatives will contact you directly.
NASDAQ® and The Nasdaq Dividend Achievers IndexesTM are registered trademarks of The NASDAQ OMX Group, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither Nasdaq nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company.
Statements regarding Nasdaq-listed companies or Nasdaq proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED. © 2015. The NASDAQ OMX Group, Inc. All Rights Reserved.
John Jacobs --Mr. Jacobs is a former Nasdaq Executive Vice President of Global Information Services, comprising the company's data products and index services businesses.