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ETF Specialist

Funds That Channel Ben Graham

Popular dividend-oriented ETFs that tilt toward yield or dividend growth have their roots in the teachings of Ben Graham.

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A version of this article was published in the July 2015 issue of Morningstar ETFInvestor. Download a complimentary copy of ETFInvestor here.

Ben Graham is often described as the father of value investing. He might also be described as the father of strategic beta. In his book "The Intelligent Investor"[1] he laid out a number of quantitative rules with which to evaluate stocks. While the precise implementation of his rules is open to interpretation, the general concepts are clear. These same concepts underlie the indexes that form the basis of many of the dividend-oriented exchange-traded funds investors use today. The rules (taken from page 114 of the 2003 edition of the book and shortened here) are:

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Michael Rawson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.