S&P launches dividend indices

IndicesS&P Indices has launched UK and European high yield indices. S&P UK High Yield Dividend Aristocrats and S&P Euro High Yield Dividend Aristocrats Indices have been licensed to State Street Global Advisors for the creation of exchange-traded funds.

The indices measure the performance of the highest dividend-yielding UK and Eurozone companies within the S&P Europe Broad Market Index. Amongst other criteria, a company must have increased dividends or maintained stable dividends for at least ten consecutive years to qualify for inclusion in the indices.

The firm already publishes a high yield dividend aristocrat index based upon the S&P 1500.

Alka Banerjee, vice president at S&P Indices, said: “Traditionally, dividends constituted only about a third of total equity returns. But the current economic climate of sluggish growth suggests that dividend-producing stocks serve an important purpose for many investors because they are usually more resilient than other asset classes in a falling market.”

State Street said it had experienced substantial demand in US and emerging market dividend ETFs and that its clients had asked for similar strategies in other regions.

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