ProShares is launching the S&P 500 Buyback Aristocrats ETF (BUYB) as investor appetite shifts from scarce dividend yields to share repurchases, a strategy that has seen S&P 500 companies spend over $1 trillion in the past year.
"While paying dividends means investors get cash right away, buybacks reduce a company’s share count, which tends to boost the share price and doesn’t trigger upfront tax bills for investors," Ian Salisbury of Barron's wrote.
The new fund, which launches Thursday with a 0.39% expense ratio, will track an equal-weighted index of 68 S&P 500 stocks that have reduced their share counts annually for the past 10 years. This "buyback aristocrat" strategy has a hypothetical 10-year total return of 14.5% a year, slightly underperforming the S&P 500's 15.3% but with significantly less tech exposure at 13% versus the index's 35%.
With the S&P 500's dividend yield near an all-time low of 1%, BUYB offers a direct channel to a corporate capital allocation trend that has outpaced dividends by more than 50%. The fund’s performance will be a key test of whether a systematic buyback strategy can consistently outperform traditional dividend-focused approaches, especially in a market dominated by a few mega-cap tech stocks.
The preference for buybacks is stark. For the 12 months through Sept. 30, 2025, S&P 500 companies spent just over $1 trillion on share repurchases, compared with $665 billion on dividends, according to S&P Dow Jones Indices.
The new ETF's underlying index is heavily weighted toward industrials (28%), financials (24%), and consumer discretionary (17%), offering a different sector profile than the tech-heavy S&P 500. Top constituents include Qualcomm, Jabil, and J.B. Hunt Transport Services.
ProShares is no stranger to "aristocrat" strategies. Its popular $11 billion ProShares S&P 500 Dividend Aristocrats ETF (NOBL) targets companies that have raised dividends for 25 straight years. However, NOBL has delivered a total return of 9.8% a year over the past decade, significantly underperforming the new buyback index's hypothetical return.
Other firms have also highlighted the power of buybacks. Cambria Funds co-founder Meb Faber has long advocated for "shareholder yield," which combines dividends and buybacks. The $935 million Cambria Shareholder Yield ETF (SYLD) has returned 13.2% a year on average over the past decade.
This article is for informational purposes only and does not constitute investment advice.
