From Nuveen Investments

Take the Rollercoaster
Out of Volatility

Key Insight

When the market experiences substantial changes in volatility, it may feel like riding a rollercoaster. However, companies with sustainable dividend growth can potentially provide a periodic cash flow regardless of the market environment. Exposure to equities that offer dividends have historically provided a buffer against market volatility.

Dividend Growers Excess Return

(During Months When the VIX Increased)

Data Sources: FactSet and Ned Davis Research, Inc. as of 1/1/98 – 12/31/17. The categories listed above are subsets of the S&P 500 Index and MSCI World Index as defined by Ned Davis Research, Inc.

Dividend Policy Description: The performance of each group is based on the equal-weighted geometric average of dividend-paying and non-dividend-paying historical S&P 500 and MSCI World Index stocks, rebalanced monthly. Each stock’s dividend policy is determined on a rolling 12-month basis. For example, a stock is classified as dividend-paying if it paid a cash dividend at any time during the previous 12 months. A stock is reclassified only if its dividend payments change. Dividend growers and initiators include stocks that raised their existing dividend or initiated a new dividend during the preceding 12 months. Dividend cutters or eliminators include stocks that lowered their existing dividend or stopped paying regular dividends during the preceding 12 months. The returns do not reflect the deduction of any fees, expenses or taxes that would reduce performance in an actual client portfolio. Returns for stocks that paid dividends assume reinvestment of all income. It is not possible to invest in an index. These groups have been determined by Ned Davis Research, Inc. Further distribution of this information is prohibited without prior permission. Copyright 2018 ® Ned Davis Research, Inc. All rights reserved.


The CBOE (Chicago Board of Exchange) Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world’s premier barometer of investor sentiment and market volatility.

The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the large and mid-cap equity market performance of developed markets.

The S&P 500® is a market weighted index of 500 stocks that are traded on the NYSE, AMEX, and NASDAQ.

Risks and Other Important Considerations

This information should not be relied upon as investment advice, recommendations, offers or solicitation of any particular security, asset class, fund, strategy, or investment product. Investing entails risk, including the possible loss of principal. There can be no assurance that any investment or asset class will provide positive performance over any period of time. Dividend yield is one component of performance and should not be the only consideration for investment. Dividends are not guaranteed and will fluctuate. Equity investments such as large-cap stocks are subject to market risk or the risk of decline in response to adverse company news, industry developments, or a general economic decline. Investments in small- and mid-cap companies are subject to greater volatility. Non-U.S. investing presents additional risks such as the potential for adverse political, currency, economic, social or regulatory developments in a country including lack of liquidity, excessive taxation, and differing legal and accounting standards. Past performance does not guarantee future results.

The statements contained herein reflect the opinions of Santa Barbara Asset Management, LLC (“Santa Barbara”) as of the date written. Certain statements are forward looking and/or based on current expectations, projections, and information currently available to Santa Barbara. Such statements may or may not be accurate over the long-term. While we believe we have a reasonable basis for our comments and we have confidence in our opinions, actual results may differ from those we anticipate. We cannot assure future results and disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise. Statistical data was taken from sources which we deem to be reliable, but their accuracy cannot be guaranteed.

Santa Barbara Asset Management, LLC is a registered investment adviser and an investment specialist of Nuveen, LLC.