General Electric Co. (GE) recently taught dividend investors a harsh lesson when it slashed its quarterly payout by 50% in what was one of the largest dividend cuts by an S&P 500 member firm since the global crisis.

Just because a company has paid a dividend for a long time does not mean the payout is immune to cuts or elimination. Exchange traded funds (ETFs) dedicated to dividend stocks, which are among the most prominent parts of the smart beta landscape, can help minimize the negative impact of dividend cuts by mitigating single-stock risk.

For example, the JPMorgan U.S. Dividend ETF (JDIV) holds a small position in GE, but because JDIV, the newest U.S. dividend ETF, is not heavily allocated to the industrial conglomerate, the fund can weather this negative dividend action.

“With the slashing of its dividend by 50%, General Electric has gone against the recent norm for S&P 500 constituents,” said CFRA Research Director of ETF & Mutual Fund Research Todd Rosenbluth. “Indeed, year to date through Friday, companies in the large-cap index were 34 times more likely to have raised their dividend than cut it. Such data supports the holding of dividend-paying stocks in a diversified ETF or mutual fund.”

To the point of minimizing single-stock risk, JDIV's largest holding accounts for barely more than 1% of the fund's total weight while the new ETF's top 10 holdings combine for approximately 8% of the roster.

JDIV follows the JP Morgan US Dividend Index, which “utilizes a rules-based approach that adjusts sector weights based on volatility and yield and selects the highest yielding stocks and aims to provide exposure to a portfolio of higher dividend yielding securities while mitigating stock specific risk,” according to J.P. Morgan Asset Management.

Since dividend yield is an element in JDIV's weighting scheme, it is not surprising that the ETF allocates over 30% of its combined weight to the utilities and consumer staples sectors. Those are two of the highest-yielding groups in the U.S. However, JDIV offers some cyclical exposure as well as highlighted by a combined weight of 27.5% to financial services and consumer discretionary stocks. Those two sectors have been among the biggest contributors to S&P 500 dividend growth over the past several years.

JDIV's annual expense ratio is 0.12%, or $12 on a $10,000, putting it at the lower end for dividend and smart beta funds. That could help the new ETF draw a quick following, particularly at a time when investors are overtly favoring ETFs with annual fees of less than 0.2%.

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