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Is ProShares Russell 2000 Dividend Growers ETF (SMDV) a Strong ETF Right Now?
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A smart beta exchange traded fund, the ProShares Russell 2000 Dividend Growers ETF (SMDV - Free Report) debuted on 02/03/2015, and offers broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Proshares, SMDV has amassed assets over $804.28 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the Russell 2000 Dividend Growth Index before fees and expenses.
The Russell 2000 Dividend Growth Index targets companies that are currently members of the Russell 2000 Index and have increased dividend payments each year for at least 10 years.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.40% for SMDV, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.25%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 29.40% of the portfolio, the fund has heaviest allocation to the Financials sector; Utilities and Industrials round out the top three.
Looking at individual holdings, J & J Snack Foods Corp (JJSF - Free Report) accounts for about 1.12% of total assets, followed by Wd-40 Co (WDFC - Free Report) and Lancaster Colony Corp (LANC - Free Report) .
SMDV's top 10 holdings account for about 10.82% of its total assets under management.
Performance and Risk
So far this year, SMDV has lost about -4.25%, and was up about 2.80% in the last one year (as of 08/23/2022). During this past 52-week period, the fund has traded between $56.51 and $67.71.
SMDV has a beta of 0.74 and standard deviation of 28.33% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
ProShares Russell 2000 Dividend Growers ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $24.12 billion in assets, Vanguard Dividend Appreciation ETF has $64.50 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is ProShares Russell 2000 Dividend Growers ETF (SMDV) a Strong ETF Right Now?
A smart beta exchange traded fund, the ProShares Russell 2000 Dividend Growers ETF (SMDV - Free Report) debuted on 02/03/2015, and offers broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Proshares, SMDV has amassed assets over $804.28 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the Russell 2000 Dividend Growth Index before fees and expenses.
The Russell 2000 Dividend Growth Index targets companies that are currently members of the Russell 2000 Index and have increased dividend payments each year for at least 10 years.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.40% for SMDV, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.25%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 29.40% of the portfolio, the fund has heaviest allocation to the Financials sector; Utilities and Industrials round out the top three.
Looking at individual holdings, J & J Snack Foods Corp (JJSF - Free Report) accounts for about 1.12% of total assets, followed by Wd-40 Co (WDFC - Free Report) and Lancaster Colony Corp (LANC - Free Report) .
SMDV's top 10 holdings account for about 10.82% of its total assets under management.
Performance and Risk
So far this year, SMDV has lost about -4.25%, and was up about 2.80% in the last one year (as of 08/23/2022). During this past 52-week period, the fund has traded between $56.51 and $67.71.
SMDV has a beta of 0.74 and standard deviation of 28.33% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
ProShares Russell 2000 Dividend Growers ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $24.12 billion in assets, Vanguard Dividend Appreciation ETF has $64.50 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.