Grower — quality raises, small yield today. Buys the raise, not the yield: 50 equally weighted large-cap stocks that have grown both dividends and earnings, passed payout-ratio and cash-to-debt screens, and are reconstituted each March. Today's yield is small — 0.86% trailing — but the compounding is the point: total return ran 14.0% year-to-date and 17.4% over the past year to October 2026, with a 5-year average of 11.0% a year. At a 0.47% expense ratio it costs more than a broad index fund, and that fee is the drag to watch.
Key risk: Time and concentration: the yield starts near 0.86%, so if the raises slow — or you need the income now — the compounding this fund is bought for never gets the years it needs. And two sectors dominate: financials near 38% and technology near 27%.
Changes if: The raises slow materially, holdings start breaching the index's payout or cash-to-debt screens, or the 0.47% fee rises. The case is the growth rate, not the 0.86% starting yield.
- ✓Coverage check: The payout and cash-to-debt screens are built into the index — holdings must have grown dividends and earnings and carry manageable payout ratios before selection; coverage is enforced before purchase.
- ✓Yield check: 0.86% now, growing by construction — $0.68 of trailing distributions at the $78.70 October 23, 2026 close, most recently $0.1521 for the September 2026 quarter. Fails 'income today', passes 'income tomorrow'.
- ✓Growth check: Total return 14.0% year-to-date, 17.4% over one year, 23.1% a year over three years and 11.0% a year over five — the raises and the price have compounded together.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.