10 February 2020
Despite markets entering 2020 at (or near) record high equity prices, the environment remains challenged by the global growth outlook, the risk of geopolitical shocks and systemically low interest rates. We remain constructive on US equities on the basis of a resilient consumer and steady inflation.
We also see increasing opportunities for investors outside the US, mainly Europe and the UK, on a relative valuation basis. Investors seeking to remain long developed market equities, but who seek some downside protection, should look at a quality income strategy to combat spikes in volatility. As the chart below illustrates, investors have come to appreciate the merits of (quality) income investing, as dividend ETFs have outpaced all other smart beta ETFs during the past year.
To learn more about why quality income investing makes sense in the current environment, please read our latest paper .
How to play this theme:
The family of S&P Dividend Aristocrats Indices picks from a diversified base of quality companies offering regular cash dividends, combining dividend growth with dividend yield, to help investors navigate uncertainty by taking a more defensive portfolio posture. Fund details are below for the US and Europe funds that could provide investors with these attributes while remaining long equities.
Additionally, SPDR is pleased to announce that, as of 10 February 2020, the Dividend Aristocrats family has expanded to include a new emerging markets exposure. Read more about it here .