IN THIS LIST

ETFs in Insurance General Accounts – 2025

Celebrating 25 Years of the S&P/ASX Indices

S&P 500 Dividend Aristocrats: The Importance of Stable Dividend Income

Redefining the Role of Index Providers

Analyzing High Dividend Yield Strategies in Australia

Research - Jun 10, 2025

ETFs in Insurance General Accounts – 2025

Anu R. Ganti

Head of U.S. Index Investment Strategy

S&P Dow Jones Indices

Nick Didio

Quantitative Analyst, Index Investment Strategy

S&P Dow Jones Indices

Sabatino Longo

Analyst, Global Equity & Thematic Indices Product Management

S&P Dow Jones Indices

Introduction

In our 10^th annual study of exchange-traded fund (ETF) usage in U.S. insurance general accounts, we review ETF usage across various types of companies and across different asset classes. We also analyze how trading patterns have varied over the years. Because of the relatively small amount of ETF holdings among insurers, the behavior of individual companies can have an impact on the results that is more idiosyncratic in nature and not necessarily indicative of a broader trend.

In 2024, U.S. insurers held USD 39.3 billion in ETFs. For the first time in three years, we saw significant inflows from larger insurers, which, coupled with market gains, led to a 14% increase in ETF assets under management (AUM) from the prior year. ETF trading volumes also increased.

ETFs in Insurance General Accounts – 2025 : Exhibit 1

Holding Analysis

As of year-end 2024, U.S. insurers invested USD 39.3 billion in ETFs, an increase of USD 4.9 billion from 2023. This is a small portion of the USD 10.4 trillion in U.S. ETF AUM, as well as the USD 13.1 trillion in insurance general account assets. As a result, the behavior of one Large or Mega company can have an outsized influence on market behavior. Exhibit 1 shows the use of ETFs by U.S. insurers over the past 20 years.

In 2024, AUM increased by 14%, outpacing the growth rate since inception. This is the first time ETF AUM increased since 2021. However, the three-year compound annual growth rate (CAGR) remained negative (see Exhibit 2), given the declines in 2022 and 2023.

ETFs in Insurance General Accounts – 2025 : Exhibit 2

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Research - Mar 21, 2025

Celebrating 25 Years of the S&P/ASX Indices

Sean Freer

Director, Global Exchange Indices

S&P Dow Jones Indices

Sue Lee

Director, APAC Head of Index Investment Strategy

S&P Dow Jones Indices

Jessica Tan

Principal, Fixed Income Indices

S&P Dow Jones Indices

Jason Ye

Senior Director, Factors and Dividends

S&P Dow Jones Indices

Aran Spivey

Senior Analyst, Global Exchange Indices

S&P Dow Jones Indices

Explore the S&P/ASX Index ecosystem

Introduction

April 3, 2025, marks 25 years since the S&P/ASX 200, S&P/ASX 300 and the wider S&P/ASX Index Series launched. Australian society has undergone considerable change in that time, as has its capital markets landscape. At the turn of the millennium, mobile phone and internet use were becoming more common but still not ubiquitous. In November 2000, only 56% of Australian households had access to a computer at home and 61% had a mobile phone.

A quarter of a century later, well-known companies and brands such as Ansett Airlines, Fairfax Media, HIH Insurance and OneTel are among many others that no longer exist, while new brands such as Virgin Australia, Fortescue, Chemist Warehouse, Guzman Y Gomez and Seek are the new household names on the ASX. With mergers, acquisitions, delistings, disruptions and fast-paced technological advancements, the makeup of the S&P/ASX 200 has evolved while also growing in size considerably.

S&P/ASX Indices Have Played a Vital Role in the Growth of ETFs and Index-Based Investing

On April 3, 2000, the first S&P/ASX investable market indices for benchmarking and performance measurement were made available to the investment community. The S&P/ASX Index Series has since served as the foundation for the growth of index-based investing in Australia and the adoption of low-cost, index-based investment strategies.

Exchange-traded funds (ETFs) have proven to be a popular vehicle for investing in index-based strategies, and it was not long after the launch of the S&P/ASX Index Series that the first ASX-listed ETFs were launched by State Street Global Advisors in 2001. ETF listings in Australia have grown significantly since 2001, with 48 passive and active funds launched in 2024. There are now over 400 ETFs listed in Australia with assets in excess of AUD 225 billion.

Today, the S&P/ASX Index Series remains at the core of the Australian ETF industry. As of Dec. 31, 2024, domestic equity-focused ETFs listed in Australia had attracted AUD 58 billion in investments, of which 62% (AUD 37 billion) were based on S&P/ASX Indices. In addition, the top three Australian ETFs by assets under management are linked to S&P/ASX Indices and are among those with the best trading spreads and liquidity in the market. See the Appendix for a list of passive ETFs listed in Australia that are linked to S&P DJI indices.

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Research - Mar 19, 2025

S&P 500 Dividend Aristocrats: The Importance of Stable Dividend Income

Rupert Watts

Head of Factors and Dividends

S&P Dow Jones Indices

Hugo Barrera

Senior Analyst, Factors and Dividends Product Management

S&P Dow Jones Indices

EXECUTIVE SUMMARY

Dividends play an important role in generating equity total return. Since 1926, dividends have contributed approximately 31% of total return for the S&P 500, while capital appreciations have contributed 69%. Therefore, sustainable dividend income and capital appreciation potential are important factors for total return expectations.
Companies use stable and increasing dividends as a signal of confidence in their firm’s prospects, while market participants consider such track records as a sign of corporate maturity and balance sheet strength.
The S&P 500 Dividend Aristocrats measures the performance of S&P 500 constituents that have followed a policy of increasing dividends every year for at least 25 consecutive years.
The S&P 500 Dividend Aristocrats exhibits both capital growth and dividend income characteristics, as opposed to alternative income strategies that may be pure yield or pure capital-appreciation oriented.
Over the long term, the S&P 500 Dividend Aristocrats exhibited higher returns with lower volatility compared with the S&P 500, resulting in higher risk-adjusted returns.
As of 2025, S&P 500 Dividend Aristocrats constituents included 69 securities, diversified across 10 sectors (see Exhibit 13 in the Appendix).
- The constituents have both growth and value characteristics.
The composition of the S&P 500 Dividend Aristocrats contrasts with that of traditional dividend-oriented benchmarks that have a steep value bias and have high exposure to the Financials and Utilities sectors. At each rebalancing, a 30% sector cap is imposed to ensure sector diversification.
The S&P 500 Dividend Aristocrats follows an equal weight methodology.
- This treats each company as a distinct entity, regardless of market capitalization.
- This also eliminates single-stock concentration risk.

INTRODUCTION

Dividends have interested market participants and theorists since the origins of modern financial theory. As such, many researchers have investigated the various topics related to dividends and dividend-paying firms. Previous studies by S&P Dow Jones Indices have shown that over a long-term investment horizon, dividend-paying constituents of the S&P 500 have outperformed the non-payers of dividends and the overall broad market on a risk-adjusted basis.

In recent years, the increasing amount of academic and practitioner research demonstrates that dividend yield is a compensated risk factor and has historically earned excess returns over a market-cap-weighted benchmark. When combined with other factors such as volatility, quality, momentum, value and size, dividend yield strategies can potentially offer exposure to systematic sources of return.

In this paper, we show that dividend yield is an important component of total return. We also highlight pertinent characteristics of the S&P 500 Dividend Aristocrats, an index that measures the performance of the S&P 500 constituents that have increased their dividend payouts for 25 consecutive years. We show that the S&P 500 Dividend Aristocrats has historically possessed desirable risk/return characteristics, offering higher risk-adjusted returns and downside protection than the broad-based benchmark. In addition, our analysis shows that the S&P 500 Dividend Aristocrats is sector diversified and displays growth and value characteristics.

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Research - Mar 10, 2025

Redefining the Role of Index Providers

Financial advisors with at least 10% of their client assets invested in exchange-traded funds (ETFs) report allocating 46% of total assets to index-based strategies. They expect that allocation to rise to 49% over the next two years.

Most financial advisors use ETFs to access index-based strategies, and, when selecting which index-based strategies, they commonly focus on index methodology. Index methodology is among the top five most important factors— trailing only expense ratio, performance, and brand of asset manager—for approximately 30% of financial advisors when selecting an index-based equity or fixed income ETF. When specifically asked about the most important considerations when reviewing an index for an index-based ETF, 82% of financial advisors agree that quality of index design and methodology is a top-three factor.

Recent market trends have supported and paved the way for greater use of index-based products among financial advisors. The U.S. wealth management market continues to witness advisors and their firms adopt financial planning as their primary value proposition, replacing investment management as their differentiator. Simultaneously, there has been growth in the use of asset allocation model portfolios as an outsourced portfolio construction solution; many of these model portfolios leverage index-based products as building blocks.

Index providers deliver the underlying indices that these index-based products aim to track, maintain key benchmarks, provide the data used as an input in the construction of asset allocation model portfolios, and produce thought leadership and other educational content. Despite these important contributions, they are often underutilized by asset managers, wealth manager home offices, and financial advisors.

S&P Dow Jones Indices, MSCI, and FTSE Russell are the top index providers within the wealth management market. They boast strong brand awareness among advisors, are commonly used by financial advisors or by asset managers to build products popular with financial advisors, and maintain the largest market share of ETF and direct indexing separately managed account (SMA) assets tracking their indices. According to Morningstar Direct data, ETFs tracking indices from S&P Dow Jones Indices (33.8%), FTSE Russell (11.3%), and MSCI (9.5%) collectively account for more than half of total ETF assets.

Asset and wealth managers should look at index providers' other offerings in addition to the index data that they provide, such as consultation during the product development process, white label and customized index capabilities, improved ease of use and access to data, insight into areas of industry innovation, and thought leadership and educational content. Asset and wealth managers may also want to focus on index providers that are introducing new indices to meet evolving client needs and enhancing data offerings as asset allocation models become more prevalent.

As index-based product development ushers more strategies into the market, asset and wealth managers would benefit from brand awareness associated with index providers, as well as index providers' thought leadership and educational content. Index provider brand can aid in asset managers' and wealth managers' product positioning, while their thought leadership and educational material can act as an additional content engine that informs advisors and helps empower their client conversations.

Data is becoming more crucial to asset allocation model providers, especially as the model portfolio landscape becomes more saturated. Asset and wealth manager model providers should consider a variety of index provider data sources (e.g., index performance, attribution analyses, constituent data, updates on changes/rebalancing) across a breadth of asset classes (e.g., fixed income, international equity, alternatives) with flexible, easy-to-use delivery options.

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Research - Mar 06, 2025

Analyzing High Dividend Yield Strategies in Australia

Jason Ye

Senior Director, Factors and Dividends

S&P Dow Jones Indices

Izzy Wang

Associate Director, Factors and Dividends

S&P Dow Jones Indices

Introduction

Dividend indices are one of the most widely recognized factor-based strategies. According to Morningstar, as of Dec. 31, 2024, there were over 400 dividend-focused exchange-traded funds (ETFs) worldwide, with more than AUD 990 billion in assets under management (AUM). Dividend ETFs had inflows of over AUD 98 billion in 2024. With over AUD 6.5 billion in AUM—or 30% of the Australian factor ETF market—the dividend factor is one of the most used in Australia.

In this paper, we will examine the Australian dividend market in depth and analyze the historical performance of the Australian high dividend yield strategy.

Australia Dividend Market

As one of the highest-yielding equity markets in the world, Australia has attracted extensive attention from market participants. As of Dec. 31, 2024, the trailing 12-month dividend yield of the S&P/ASX 300 was 3.5%, one of the highest among major developed markets (see Exhibit 1). ETF assets tracking dividend strategies in Australia have grown from AUD 571 million in 2012 to AUD 6.5 billion as of Dec. 31, 2024, with a compound annual growth rate (CAGR) of 22.5% (see Exhibit 2).

Analyzing High Dividend Yield Strategies in Australia: Exhibit 1

Analyzing High Dividend Yield Strategies in Australia: Exhibit 2

Through the analysis of historical data, we have observed three major characteristics in the Australian dividend market:

A resilient dividend pool with a stable growth rate;
The financials and the materials sectors contributed the majority of dividends; and
A high level of dividend yield and payout ratio.

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