S&P Dow Jones Dividend Indices

S&P Dow Jones Dividend Indices

July 2013 For Financial Professionals/Not for Public Distribution

Analytic services and products by S&P Dow Jones Indices are the result of separate activities designed to preserve the independence and objectivity of each analytic process. S&P Dow Jones Indices has established policies and procedures to maintain the confidentiality of non-public information received during each analytic process.

Agenda S&P Dow Jones Dividend Indices

SECTION 01 Historical Importance of Dividends SECTION 02 A Review of the S&P Dow Jones Dividend Indices SECTION 03 Historical Performance, Yields, Sector Composition

2

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The Historical Importance of Dividends

In the United States, over the past 25 years, dividend income has been steadily increasing while interest income has shrunk.

The gap between the percentages of personal income attributed to dividend and interest has decreased to the smallest amount as well.

$1,600

18%

$1,400

16%

$1,200

14%

$1,000

12%

10% $800

8%

$600

6%

$400

4%

$200

2%

$0

0%

Personal Dividend Income

Personal Interest Income

Dividend Income as % of Personal Income Interest Income as % of Personal Income

Source: Bureau of Economic Analysis. Data as of December 31, 2012. Charts are provided for illustrative purposes.

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

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Historical Importance of Dividends

Dividends contribute approximately a third of equity return.....

60%

53% 50%

50%

40%

39%

34%

30%

28%

26%

20% 14%

10%

Contribution of dividend may vary from decade to decade.

Not shown in the graph is the dividend income during the 2000s where it comprised nearly 134% of total return.

0% 1940's

1950's

1960's

1970's

1980's

1990's

1926 to Dec2012

Source: S&P Dow Jones Indices. Data from December 31, 1925 - December 31, 2012. Charts are provided for illustrative purposes. The S&P 500 did not actually have 500 stocks prior to 1957, and was known as the S&P Composite Index. However, for simplicity's sake we use the term "S&P 500" throughout the presentation.

4

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Compounding Effect of Dividends - Cumulative Growth

10000

1000

100

10

1

0.1 1932

1942

1952

1962

S&P 500 PR

1972

1982

1992

S&P 500 Dividend Reinvested TR

2002

2012

Source: S&P Dow Jones Indices. Data from 12/31/1926 - 12/31/2012..Charts are provided for illustrative purposes. Past Performance is not a guarantee of future

performance.

The S&P 500 did not actually have 500 stocks prior to 1957, and was known as the S&P Composite Index. However, for simplicity's sake we use the term "S&P 500"

throughout the presentation.

5

PROPRIETARY. PERMISSION TO REPRINT OR DISTRIBUTE ANY CONTENT FROM THIS PRESENTATION REQUIRES THE WRITTEN APPROVAL OF S&P DOW JONES INDICES.

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