Exchange-traded funds, or ETFs, have exploded in popularity over recent years. Demand begets new products, but these new ETFs aren't always destined for long lifespans. An ETF from a respected name with a solid methodology could make it to investors' watchlists, though.

ProShares' newly launched dividend ETF meets both of those qualifications. Does the ETF offer an advantage over existing products, however?

New kid on the stock market
The ProShares S&P 500 Aristocrats ETF tracks the S&P 500 Dividend Aristocrats Index, which only includes companies that have increased dividend payments for the past 25 years. That screener currently narrows the field to 54 large-cap holdings, with consumer staples accounting for about 24% of the portfolio.  

A new ETF lacks a performance history, but the index can serve as stand-in, particularly when the tracking methodology is simple. The Dividend Aristocrats Index has outperformed the S&P 500 (SNPINDEX:^GSPC) for the past five years.:

 

1-Year Return

3-Year Return

5-Year Return

S&P 500

21.53%

15.96%

16.19%

Dividend Aristocrats

24.53%

17.66%

19.74%

Total annualized returns. Source: S&P Dow Jones Indices.

More information about the ETF will become available with time. With ProShares' solid reputation and a 0.35% expense ratio, however, this could prove a solid satellite choice for income investors looking for reliability. The ETF could even move into core holding territory once it has found its legs. 

Close alternative
Investors have plenty of options when it comes to dividend-focused ETFs. There's even a popular ETF that bears a close resemblance to ProShares' new offering.

SPDR S&P Dividend ETF (NYSEMKT:SDY) tracks a similar index to ProShares' new ETF but only requires 20 years of dividend payments and contains more of a market-cap mix.

This ETF currently spreads $12.5 billion in assets across 85 holdings. The fund has an expense ratio of 0.35% and a dividend yield of 2.6%. Historic net asset value, or NAV, returns have more volatility than the Dividend Aristocrats index due to the presence of small caps and midcaps. But the SPDR ETF is still considered one of the most reliable dividend choices around.

The SPDR ETF benefits from having a trackable performance history and a higher liquidity than the new ProShares ETF, which makes the ETF easier to buy and sell. 

Aristocrat advantage 
ProShares' Dividend Aristocrats ETF could entice new investors away from the more complicated Vanguard High Dividend Yield ETF (NYSEMKT:VYM), which tracks a custom index where stocks rank according to dividend yield. Stocks get the boot if the dividend payments stop during the year, but otherwise they have no guaranteed history of payments. Vanguard's ETF is also market-cap weighted, as opposed to the equal-weight Proshares portfolio.

That's not to say that Vanguard's ETF is a bad investment. It's a solid core choice for those comfortable with a more complicated index and smaller returns. Vanguard's ETF has underperformed the Dividend Aristocrats index -- but not by much more than its 0.10% expense ratio.

Foolish final thoughts 
There's always an added risk with new ETFs without a proven track record. The construction of ProShares' new ETF has the marks of a solid player, as the 25-year dividend requirement -- and the consumer staples slant -- strip away most of the volatility. SPDR's competing aristocratic ETF wins for now with its performance track record and beneficial liquidity.

Brandy Betz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.