Launched on 10/09/2013, the ProShares S&P 500 Dividend Aristocrats ETF (NOBL – Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box – Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Proshares. It has amassed assets over $11.68 billion, making it one of the larger ETFs in the Style Box – Large Cap Value. Before fees and expenses, NOBL seeks to match the performance of the S&P 500 DividendAristocrats Index.
The S&P 500 Dividend Aristocrats Index targets companies that are currently members of the S&P 500, have increased dividend payments each year for at least 25 years & meet certain market capitalization & liquidity requirements.
Cost & Other Expenses
Investors should also pay attention to an ETF’s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
It’s 12-month trailing dividend yield comes in at 2.05%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For NOBL, it has heaviest allocation in the Consumer Staples sector –about 24.50% of the portfolio –while Industrials and Materials round out the top three.
When you look at individual holdings, Emerson Electric Co (EMR – Free Report) accounts for about 1.84% of the fund’s total assets, followed by Walmart Inc (WMT – Free Report) and Cincinnati Financial Corp (CINF – Free Report) .
Its top 10 holdings account for approximately 15.18% of NOBL’s total assets under management.
Performance and Risk
The ETF return is roughly 0% and is up about 6.72% so far this year and in the past one year (as of 01/02/2025), respectively. NOBL has traded between $93.48 and $108.47 during this last 52-week period.
NOBL has a beta of 0.91 and standard deviation of 14.61% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 67 holdings, it effectively diversifies company-specific risk.
Alternatives
ProShares S&P 500 Dividend Aristocrats ETF is a reasonable option for investors seeking to outperform the Style Box – Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core Dividend Growth ETF (DGRO – Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG – Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $30.01 billion in assets, Vanguard Dividend Appreciation ETF has $85.67 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box – Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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