The S&P/TSX Canadian Dividend Aristocrats index is designed to measure the performance of S&P/Citigroup Broad Market Index (BMI) Canada constituents that have followed a managed-dividends policy of consistently increasing dividends every year for at least seven years.
Since 1956, dividends have notably contributed 30% of the total equity return of the S&P/TSX Composite index, while capital gains accounted for the remaining 70%. The S&P/TSX Canadian Dividend Aristocrats index captures both sustainable dividend income and capital appreciation potential which are both key factors in investors’ total return expectations.
Index constituents exhibit the following characteristics:
Underlying Indices –S&P/Citigroup BMI Canada
Weighting –Indicated Annual Dividend Yield weighted; No individual stock can represent more than 8% of the index weight
Listing –Common stock or income trust listed on the Toronto Stock Exchange (TSX)
Dividends –A security must have increased ordinary cash dividends every year for at least seven consecutive years
Rebalancing –Annually in December
Index Governance and Policy
The S&P/TSX Canadian Dividend Aristocrats index is maintained by the S&P/TSX Canadian Index Committee. The Index Committee is comprised of four members representing Standard & Poor’s and three members representing the Toronto Stock Exchange. The Index Committee is chaired by a member designated by Standard & Poor’s. Meetings are held monthly, and from time to time, as needed. The Index Committee is responsible for setting rules and policies for the S&P/TSX Canadian Dividend Aristocrats index, determining the composition of the index and administering its methodology.
S&P Global Equity Indices are comprehensive, rules-based indicators of global stock market performance. These indices provide investors with broad benchmarks that can be used to manage and measure the risk/return characteristics of a portfolio to the equity investment opportunities available to portfolio managers.
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