Higher total returns with lower volatility are typical characteristics of the Dividend Aristocrats. The Dividend Aristocrats, have historically shown smaller draw-downs during recessions versus the S&P 500. For example in 2008 the Dividend Aristocrats Index declined 21.9%, compared to the S&P 500 declined of 37%. Also the in 2002 the dividend aristocrats declined by -9.9% while the S&P 500 showed a negative performance of -22.10%.
In 2018 the Dividend Aristocrats (-2.73%) also outperformed the S&P500 (-4.38%) by 1.65%.
Since the 2000, the dividend aristocrats outperformed the S&P500 in 60% of the cases with an average difference of 8.08%. Taking the under-performance in to account the average out-performance is still 4.2%.
The last diagram (below) shows the performance per holding period. The performance/yield triangle shows the average annual returns for any investment periods, ie combinations of buy and sell times on an annual basis. The “year of buy” is plotted on the horizontal axis and the “year of sell” on the vertical axis. The average annualized return can be seen at the intersection of these two coordinates.
For example, those who acquired the dividend aristocrats at the end of 2000 and sold them at the end of 2002 achieved an average annual return of -0.08%. With an exit in 2003, however, a per-annum return (cagr) of 7.78% is calculated.
The average data in the bottom indicate which average annual yield was achieved at the start of the respective year. Starting with a position in the aristocrats at the end of 2000, Dividend Aristocrats (buy&hold) investors made e.g. average annual price returns of 8.07%.