Covered, diversified, sector-balanced. A 3.38% trailing yield from 52 stocks — the five highest-yielding S&P 500 names in each of ten sectors, equally weighted by sector — at a 0.36% expense ratio. Trailing-12-month distributions of $2.45 a share are ordinary dividends from the holdings, not option premium or return of capital, and the September 2026 payout of $0.6326 was up 12.7% on the year-earlier quarter.
Key risk: Dogs-by-construction — the screen buys each sector's highest yielders, which are often its most beaten-down names, so a value trap in any one sector lands in the fund at full sector weight.
Changes if: Trailing distributions fall for two consecutive quarters, or the fund's sector-equal weighting is abandoned. Distribution trend is the tripwire.
- ✓Yield check: 3.38% trailing — $2.45 of distributions over the trailing 12 months (Dec. 2025 $0.5489, Mar. 2026 $0.6148, Jun. 2026 $0.6556, Sep. 2026 $0.6326) at the $72.64 close on Oct. 23, 2026.
- ✓Expense check: 0.36% expense ratio — modest for a screened dividend portfolio and below the large-value category average.
- ✓Diversification check: 52 holdings, five per sector across ten sectors — no single name above about 2.8%, so no one dividend cut breaks the payout.
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.