- Recent market volatility has left equity investors with few opportunities for protection and questioning the stability of dividend income streams.
- We believe that strategies such as the Dividend Aristocrats, which focus on dividend stability, could be well positioned for the current environment
Dividend Strategy Performance Remains Challenged
The coordinated nature of recent equity market pullbacks has adversely affected the selective nature of the Dividend Aristocrats index strategies. During broad sell-offs, it’s harder for defensive smart beta funds to provide the same downside protection they have historically demonstrated. The recent market pullback saw the MSCI World Index sell off 30.67% in less than a month (28 days). During this decline, the difference between the best performing sector (Consumer Staples) and the market was only 13.58%.1