About
The Defensive Dividend Aristocrats objective is to outperform the Dividend Aristocrats over any five-year rolling time horizon, especially in bear markets. The maximum draw-down (mdd) should be lower, so less volatility than the broader market. The main is to show that next to dividend growth, price-return and risk ratios are also important.
The idea of the Defensive Dividend Aristocrats is to invest in 10 Dividend Aristocrats that are selected based on price-return and risk-ratios at year-end. Combined with the dividend growth characteristics of all Aristocrats, this should result in a comfortable set of companies for a long-term dividend portfolio.
The Defensive Aristocrats are selected on performance-based criteria:
- Geometric Annual performance of the last 10 years (GeoAP10)
- Win-ratio, the chance of a positive monthly performance
- Loss-ratio, the chance of a monthly loss multiplied by the weighted average loss
Getting started
We created the Defensive Dividend Aristocrats so customers can follow a selection of dividend aristocrats. Some investors could mirror the portfolio holding for holding, but others use the list to generate investment ideas and make sense of trends in their own portfolios.
If you decide to mirror this portfolio, our recommendation would be to invest equally across all 10 holdings and if possible take several weeks/months to be buildup this position. This provides immediate diversification and avoids market timing.
More details can be found in the article on the defensive aristocrats.
Below are the 10 defensive aristocrats selected beginning of 2021 sorted on their current loss ratio.
