Investors concerned about the market may want to consider stocks that have stood the test of time—also known as dividend monarchs.
That’s a top strategy for Roundhill Investments, which launched its S&P Dividend Monarchs ETF this month.
“It has its name for a reason. It focuses on the dividend monarchs. These are companies that have increased their dividends every year for at least 50 years,” David Mazza, Roundhill’s chief strategy officer, told CNBC’s “ETF Edge” this week.
According to the company’s website, it is the first US-listed ETF designed to track the performance of this type of stock.
“These companies have been through everything. “They have been through wars, recessions and most recently a global pandemic and have been able to reward their shareholders every year with an increase in their dividends,” said Mazza, “many of which are stocks from the era of President “Dwight Eisenhower”.
As of November 9, FactSet reports that the top holdings are the S&P Dividend Monarchs ETF 3M, Federal Realty Investment Trust, Leggett & Platt, Black Hills Corporation And Stanley Black & Decker.
“No contact with IT and no contact with communication services”
“It’s a healthy excess weight Staple food, Industrial companiesand then Utilities. “So it’s a mix of your traditionally defensive sectors,” he noted. “In this ETF is [there’s] no exposure to IT and no exposure to Communication Services. So for investors looking to rebalance from the names that have led the company market higher this year… something like the Dividend Monarchs ETF can be an opportunity for them.
Todd Rosenbluth from VettaFi also believes dividend monarchs are currently a safer option for investors.
“I think we see it that way Bond yields have fallen, dividends are becoming more attractive. “Investors can benefit from the upswing in the stock market through dividend strategies, but also receive some downside risk protection and stability through dividends,” said the company’s head of research.