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TalkingPoints: S&P 500 Dividend Aristocrats Bond Select 30 Index Explore how index design can influence yield.
BY Kevin Horan

The S&P 500 Dividend Aristocrats Bond Select 30 Index is composed of up to 30 bonds issued by unique “Aristocrat” dividend issuers of the S&P 500 Dividend Aristocrats. The S&P 500 Dividend Aristocrats Bond Select 30 Index is designed to be a more liquid and investable subset of the S&P 500 Bond Index, while representing those S&P 500 issuers that have increased their dividend payouts.


What is the S&P 500 Dividend Aristocrats Bond Select 30 Index?


The S&P 500 has been the flagship index tracking the U.S. equity market for over 50 years. Over the past few years, corporations have issued large amounts of debt, likely taking advantage of the lower interest rate environment. The S&P 500 Bond Index seeks to track debt issued by members of the S&P 500. The S&P 500 Dividend Aristocrats Bond Select 30 Index is composed of up to 30 bonds issued by unique “Aristocrat” dividend issuers of the S&P 500 Dividend Aristocrats, based on a set of eligibility criteria. On the equity side, these dividend issuers are required to have increased dividends every year for at least 25 years. The select index universe consists of bonds that are members of the S&P 500 Investment Grade Corporate Bond Index, and each issuer must be a current member of the S&P 500 Dividend Aristocrats. The issuers are ranked in order of market value, and the 30 largest names are selected. The index captures bonds that mature between one and seven years, and it captures only one bond per issuer, with the largest bond of that issuer chosen. The S&P 500 Dividend Aristocrats Bond Select 30 Index is designed to be a more liquid and investable subset of the S&P 500 Bond Index, while representing those S&P 500 issuers that have increased their dividend payouts.

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