Exchange Traded Funds (ETFs)

Invest in ‘Noble’ Dividend Payers with This Fund

Investing in companies that pay strong and consistent dividends has long been a tried-and-true investment theme, particularly for those seeking stability and consistent payout.

These companies often perform better in difficult market conditions, such as those we face today because of economic issues in the United States and geopolitical events. One way to pursue this strategy and take the theme of stability and consistency to another level is with S&P 500 Dividend Aristocrats Fund (NOBL).

The S&P 500 Dividend Aristocrats are companies that have increased their dividends for at least 25 consecutive years. Some of these companies have maintained rising dividend policies for significantly longer than that. Companies that achieve this status are typically safe, steady household names with solid fundamentals. They may not be the ones you see making headlines, but they have been quietly performing for decades. That’s what you’ll find in this exchange-traded fund (ETF).

Over the last 12 months, NOBL is up 1.67%. That may not sound like much, but in the current market environment, it is noteworthy. Its distribution yield sits at 1.54%, but if the companies held by the fund maintain their policies, investors can expect their effective yield on an initial investment to increase over the years. The market cap of this fund is $90 billion, and its expense ratio is a reasonable 0.35%.

Chart courtesy of www.StockCharts.com

Top holdings for NOBL include Albemarle Corp. (ALB), 1.90%; Amcor Plc (AMCR), 1.82%; Exxon Mobil Corp. (XOM), 1.82%; Brown Forman Corp. (BF/B), 1.79%; and IBM Corp. (IBM), 1.76%. There are 64 positions in total, with each accounting for more than 1% of assets.

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Top sectors include consumer staples, industrial, financials materials and health care, with the other major sectors represented but well behind the top five.

For investors seeking relatively safe U.S. equities and interested in getting paid to hold them, S&P 500 Dividend Aristocrats Fund (NOBL) may present an attractive investment opportunity.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.