Yahoo Finance Is ProShares S&P 500 Dividend Aristocrats ETF (NOBL) a Strong ETF Right Now?
Launched on 10/09/2013, the ProShares S&P 500 Dividend Aristocrats ETF (NOBL) 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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Proshares, NOBL has amassed assets over $11.53 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund 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 NOBL, making it on par with most peer products in the space.
NOBL's 12-month trailing dividend yield is 2.19%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
NOBL's heaviest allocation is in the Industrials sector, which is about 24.20% of the portfolio. Its Consumer Staples and Materials round out the top three.
Taking into account individual holdings, C.h. Robinson Worldwide Inc (CHRW) accounts for about 1.76% of the fund's total assets, followed by Albemarle Corp (ALB) and Nextera Energy Inc (NEE).
The top 10 holdings account for about 14.81% of total assets under management.
Performance and Risk
The ETF has added about 2.20% and it's up approximately 6.54% so far this year and in the past one year (as of 06/27/2024), respectively. NOBL has traded between $84.12 and $101.41 during this last 52-week period.
The ETF has a beta of 0.91 and standard deviation of 14.84% for the trailing three-year period, making it a medium risk choice in the space. With about 68 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) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $27.13 billion in assets, Vanguard Dividend Appreciation ETF has $79.41 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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ProShares S&P 500 Dividend Aristocrats ETF (NOBL): ETF Research Reports
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
Albemarle Corporation (ALB) : Free Stock Analysis Report
Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports
iShares Core Dividend Growth ETF (DGRO): ETF Research Reports
