ProShares Russell US Dividend Growers ETF (TMDV) seeks to track the Russell 3000 Dividend Elite Index, which measures U.S. companies that have consistently increased their dividend payments for at least 10 consecutive years. This dividend growth equity ETF focuses on established companies with proven track records of returning cash to shareholders through rising dividend payments.
How It Works
TMDV uses a passively managed, modified market-capitalization-weighted approach that screens the Russell 3000 universe for companies meeting strict dividend growth criteria. The fund requires constituents to have increased dividends annually for a minimum of 10 years, with additional quality screens for financial stability. Holdings are weighted by market cap with concentration limits to prevent over-exposure to any single stock. The index reconstitutes annually each June to maintain dividend growth requirements.
Key Features
- Focuses exclusively on dividend aristocrats with 10+ years of consecutive dividend increases, filtering for quality and consistency
- Modified cap-weighting prevents mega-cap concentration while maintaining exposure to proven dividend-growing companies across all sectors
- Currently yields 2.84% with built-in growth potential as companies continue raising their dividend payments over time
Risks
- This ETF can lose value if dividend-focused stocks fall out of favor, as growth investors may rotate away during bull markets favoring non-dividend payers
- Companies may cut or suspend dividends during economic stress, potentially causing removal from index and triggering selling pressure on holdings
- Value and dividend stocks typically underperform during growth-led market rallies, potentially lagging broader market returns for extended periods
Who Should Own This
Best suited for income-focused investors with 3-7 year time horizons seeking growing dividend income rather than maximum capital appreciation. Medium risk tolerance required due to equity volatility and sector concentration. Works well as a satellite holding (10-25% of equity allocation) for retirees or pre-retirees prioritizing sustainable, growing income streams over pure growth.