Archive for May 2019

A Look At Global Aristocrats Index

The international index that I have picked is the S&P Global Dividend Aristocrats Index. Its ETF is the SPDR S&P Global Dividend ETF, WDIV.

The Global Dividend Aristocrats Index is based on the S&P Global BMI (Broad Market Index). Stocks in the Global BMI must have a market cap of at least USD $100 million, must meet liquidity standards (at least 20% of a stock’s market cap should be traded in a twelve-month period for stocks based in developed markets, 10% for emerging markets), be in a developed or emerging market, have at least 50% of their shares available for public trading, and it only includes common stocks (no fixed-dividend shares, closed-end funds, investment trusts, convertible bonds, unit trusts, equity warrants, mutual fund shares, limited partnerships, business development companies (BDCs) and no preferred stock with a guaranteed fixed return).

The S&P Global Dividend Aristocrats Index is weighted by yield. The criteria are:
– The stocks are taken from the S&P Global BMI (Broad Market Index)
– It includes stocks with market caps of at least USD $1 billion.
– Stocks have a maximum payout ratio of 100%, or not have a negative EPS
– Max yield of 10%
– The goal is for the index to contain 100 stocks (there are rules for what happens if less that 100 meet the criteria)
– No more than 20 stocks can come from one country (right now, US and Canada each have 20)
– Stocks must have increased or at least maintained their dividend for at least 10 years (since the index is weighted by yield, I do not know if a dividend grower would take priority over a dividend maintainer)

I assume one reason they include dividend maintainers is that raising dividends may not be as common in some countries. In many countries, companies do not pay a set amount every quarter like American companies do.

There is an S&P International Dividend Aristocrats Index. It is the Global Aristocrats Index without any US stocks. Its ETF, FID, has a high expense ratio of 0.60%. I find it odd that the ETF page on ETFDB does not have a link to the actual ETF. Even though it has a high ratio, the website looks cheap and does not inspire confidence. I find it odd that index providers do not license their indexes (or at least related indexes) to one firm. Or at least reputable firms. Frankly, I don’t trust anybody from Wheaton.

“S&P”, “Dividend Aristocrats”, and possibly a few other terms are trademarks of S&P Dow Jones Indices LLC.

Big Jim will invest his money with companies he thinks he can trust.

“Behold The Bridegroom” by Γύζης Νικόλαος (Nikolaos Gyzis) (1842 -1901), on exhibit at the National Gallery in Athens, assumed allowed under Fair Use.

2019-04 Dividend Income Report

Here is the dividend income report for April, 2019.

The monthly dividend income came out to $483.26. The yearly income total for 2019 through the end of the month was $1855.76.

The income for April, 2018 was $50.88, and the yearly income for 2018 through the end of April was $1276.89.

I have looked at the indexes used by some of the funds I invest in, and I am selling some of my funds. I am moving my domestic funds to the SPDR S&P Dividend ETF, SDY, which follows the S&P High Yield Dividend Aristocrats Index I might put the money that was in international ETFs into SPDR S&P Global Dividend ETF, WDIV, which follows the S&P Global Dividend Aristocrats Index It has some of its assets in US firms, but most of it is in other countries.

These funds have their assets in fewer firms than the ETFs that I am selling, but they still have money in more companies than I owned when I had my money in individual stocks.

I am also thinking about moving my money market fund into Realty Income, the Monthly Dividend Company Getting monthly dividends sounds nice. They are part of the S&P High Yield Dividend Aristocrats Index (1.45% of SDY). I know Wolf Street has been blogging about the retail apocalypse (remember kids, it’s not just because of Amazon; private equity is also a big factor), but Realty Income has their quarterly calls available on their site. If I keep track of it, things might work out okay; as Andrew Carnegie said, the way to get rich is to put all your eggs in one basket and watch that basket carefully. They still increased payouts during the Great Recession, so I am sure they will do fine during the next downturn.

Besides, a lot of people who predict disaster all the time never see any good news anywhere, and never seem to reflect that they might be wrong when they see their predictions not coming true.

I find it a bit odd that index providers will license their indexes to different firms. It is pretty frustrating that many of the providers do not provide a list of constituents on their index pages. Some of them give the top ten, but not the whole list.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each April from 2011 through 2019:

Month YTD Amount 3MMA 12MMA
2019-04 $1855.76 $483.26 $588.35 $629.22
2018-04 $1276.89 $50.88 $405.77 $583.24
2017-04 $1814.94 $324.66 $532.02 $522.40
2016-04 $1622.67 $270.38 $461.86 $471.14
2015-04 $1441.12 $261.30 $409.21 $395.68
2014-04 $1130.58 $196.43 $323.64 $303.18
2013-04 $898.59 $179.23 $262.82 $289.40
2012-04 $1010.82 $218.56 $274.05 $271.21
2011-04 $848.29 $203.10 $216.30 $179.46

Here are the securities and the income amounts for April, 2019:

  • Vanguard Dividend Appreciation ETF: $208.52
  • Vanguard REIT ETF: $130.79
  • Vanguard Total Bond Market ETF: $41.37
  • Vanguard Total International Bond ETF: $11.08
  • Money Market: $91.50

Big Jim prepares for the future, but not at the expense of awareness.

Painting of the Annunciation by Guido of Siena (13th Century), assumed allowed under Fair Use.