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Is First Trust Dow Jones Global Select Dividend ETF (FGD) a Strong ETF Right Now?
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Launched on 11/21/2007, the First Trust Dow Jones Global Select Dividend ETF (FGD - Free Report) is a smart beta exchange traded fund offering broad exposure to the World ETFs 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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. FGD has been able to amass assets over $655.60 million, making it one of the larger ETFs in the World ETFs. Before fees and expenses, FGD seeks to match the performance of the Dow Jones Global Select Dividend Index.
The Dow Jones Global Select Dividend Index is an indicated annual dividend yield weighted index of 100 stocks selected from the developed-market portion of the Dow Jones World Index.
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.
Operating expenses on an annual basis are 0.56% for FGD, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 6.77%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Mitsui O.s.k. Lines, Ltd. (9104.JP) accounts for about 2.24% of total assets, followed by Camping World Holdings, Inc. (class A) (CWH - Free Report) and Hapag-Lloyd Ag (HLAG.GY).
FGD's top 10 holdings account for about 17.33% of its total assets under management.
Performance and Risk
The ETF has added roughly 0.94% and was up about 6.08% so far this year and in the past one year (as of 09/13/2023), respectively. FGD has traded between $18.30 and $23.92 during this last 52-week period.
FGD has a beta of 0.93 and standard deviation of 17.12% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Dow Jones Global Select Dividend ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares MSCI ACWI ETF (ACWI - Free Report) tracks MSCI All Country World Index and the Vanguard Total World Stock ETF (VT - Free Report) tracks FTSE Global All Cap Index. IShares MSCI ACWI ETF has $17.76 billion in assets, Vanguard Total World Stock ETF has $28.84 billion. ACWI has an expense ratio of 0.32% and VT charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
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 Dow Jones Global Select Dividend ETF (FGD) a Strong ETF Right Now?
Launched on 11/21/2007, the First Trust Dow Jones Global Select Dividend ETF (FGD - Free Report) is a smart beta exchange traded fund offering broad exposure to the World ETFs 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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. FGD has been able to amass assets over $655.60 million, making it one of the larger ETFs in the World ETFs. Before fees and expenses, FGD seeks to match the performance of the Dow Jones Global Select Dividend Index.
The Dow Jones Global Select Dividend Index is an indicated annual dividend yield weighted index of 100 stocks selected from the developed-market portion of the Dow Jones World Index.
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.
Operating expenses on an annual basis are 0.56% for FGD, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 6.77%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Mitsui O.s.k. Lines, Ltd. (9104.JP) accounts for about 2.24% of total assets, followed by Camping World Holdings, Inc. (class A) (CWH - Free Report) and Hapag-Lloyd Ag (HLAG.GY).
FGD's top 10 holdings account for about 17.33% of its total assets under management.
Performance and Risk
The ETF has added roughly 0.94% and was up about 6.08% so far this year and in the past one year (as of 09/13/2023), respectively. FGD has traded between $18.30 and $23.92 during this last 52-week period.
FGD has a beta of 0.93 and standard deviation of 17.12% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Dow Jones Global Select Dividend ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares MSCI ACWI ETF (ACWI - Free Report) tracks MSCI All Country World Index and the Vanguard Total World Stock ETF (VT - Free Report) tracks FTSE Global All Cap Index. IShares MSCI ACWI ETF has $17.76 billion in assets, Vanguard Total World Stock ETF has $28.84 billion. ACWI has an expense ratio of 0.32% and VT charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
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.