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Is First Trust Value Line Dividend ETF (FVD) a Strong ETF Right Now?
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Making its debut on 08/19/2003, smart beta exchange traded fund First Trust Value Line Dividend ETF (FVD - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FVD has been able to amass assets over $12.32 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the Value Line Dividend Index.
The Value Line Dividend Index is a modified equal dollar weighted index comprised of U.S. exchange listed securities of companies that pay above-average dividends and have potential for capital appreciation.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.67%, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.11%.
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.
This ETF has heaviest allocation in the Utilities sector - about 22.40% of the portfolio. Consumer Staples and Industrials round out the top three.
Looking at individual holdings, Intel Corporation (INTC - Free Report) accounts for about 0.68% of total assets, followed by The Kroger Co. (KR - Free Report) and Sanofi (adr) (SNY - Free Report) .
FVD's top 10 holdings account for about 6.47% of its total assets under management.
Performance and Risk
The ETF has added about 2.20% so far this year and is up roughly 1.88% in the last one year (as of 05/08/2023). In the past 52-week period, it has traded between $35.61 and $42.23.
The fund has a beta of 0.79 and standard deviation of 15.73% for the trailing three-year period, which makes FVD a medium risk choice in this particular space. With about 173 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Value Line Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $49.54 billion in assets, Vanguard Value ETF has $100.77 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
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 - Large 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 First Trust Value Line Dividend ETF (FVD) a Strong ETF Right Now?
Making its debut on 08/19/2003, smart beta exchange traded fund First Trust Value Line Dividend ETF (FVD - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FVD has been able to amass assets over $12.32 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the Value Line Dividend Index.
The Value Line Dividend Index is a modified equal dollar weighted index comprised of U.S. exchange listed securities of companies that pay above-average dividends and have potential for capital appreciation.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.67%, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.11%.
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.
This ETF has heaviest allocation in the Utilities sector - about 22.40% of the portfolio. Consumer Staples and Industrials round out the top three.
Looking at individual holdings, Intel Corporation (INTC - Free Report) accounts for about 0.68% of total assets, followed by The Kroger Co. (KR - Free Report) and Sanofi (adr) (SNY - Free Report) .
FVD's top 10 holdings account for about 6.47% of its total assets under management.
Performance and Risk
The ETF has added about 2.20% so far this year and is up roughly 1.88% in the last one year (as of 05/08/2023). In the past 52-week period, it has traded between $35.61 and $42.23.
The fund has a beta of 0.79 and standard deviation of 15.73% for the trailing three-year period, which makes FVD a medium risk choice in this particular space. With about 173 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Value Line Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $49.54 billion in assets, Vanguard Value ETF has $100.77 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
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 - Large 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.