For investors seeking stability and long-term growth, there’s a new investment strategy in town, and it’s all about “dividend monarchs.” Roundhill Investments recently introduced its S&P Dividend Monarchs ETF, which focuses on companies that have consistently increased their dividends every year for a minimum of 50 years. This marks the first U.S.-listed ETF designed to track the performance of such stocks.
Roundhill’s Chief Strategy Officer, David Mazza, emphasized the resilience of these companies, which have weathered wars, recessions, and even a global pandemic while continuing to reward shareholders with rising dividends. He affectionately refers to many of them as “Dwight Eisenhower”-era stocks.
As of November 9, the S&P Dividend Monarchs ETF’s top holdings include 3M, Federal Realty Investment Trust, Leggett & Platt, Black Hills Corporation, and Stanley Black & Decker.
Mazza highlighted the ETF’s emphasis on traditionally defensive sectors, such as consumer staples, industrials, and utilities, with no exposure to information technology or communication services. For investors looking to reallocate their portfolios away from high-performing sectors, the dividend monarchs ETF provides a potential opportunity.
Todd Rosenbluth, from VettaFi, also views dividend monarchs as a safer investment option. As bond yields decline, dividends become more appealing to investors, offering upside potential in the stock market along with downside protection and stability.
Investors looking for stability and long-term growth may find dividend monarchs to be a compelling addition to their portfolios.