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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 Broad Developed World ETFs 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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, and has been able to amass over $557.67 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. FGD, before fees and expenses, 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.56% for this ETF, which makes it on par with most peer products in the space.
FGD's 12-month trailing dividend yield is 5.69%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Mitsui O.s.k. Lines, Ltd. (9104.JP) accounts for about 2.75% of the fund's total assets, followed by Nippon Yusen K.k. (9101.JP) and Industrial Bank Of Korea (ibk) (024110.KS).
FGD's top 10 holdings account for about 19.14% of its total assets under management.
Performance and Risk
Year-to-date, the First Trust Dow Jones Global Select Dividend ETF has added roughly 6.10% so far, and was up about 15.11% over the last 12 months (as of 05/29/2024). FGD has traded between $19.81 and $23.93 in this past 52-week period.
FGD has a beta of 0.93 and standard deviation of 15.71% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 105 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Dow Jones Global Select Dividend ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $18.66 billion in assets, Vanguard Total World Stock ETF has $36.49 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 Broad Developed 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 Broad Developed World ETFs 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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, and has been able to amass over $557.67 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. FGD, before fees and expenses, 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.56% for this ETF, which makes it on par with most peer products in the space.
FGD's 12-month trailing dividend yield is 5.69%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Mitsui O.s.k. Lines, Ltd. (9104.JP) accounts for about 2.75% of the fund's total assets, followed by Nippon Yusen K.k. (9101.JP) and Industrial Bank Of Korea (ibk) (024110.KS).
FGD's top 10 holdings account for about 19.14% of its total assets under management.
Performance and Risk
Year-to-date, the First Trust Dow Jones Global Select Dividend ETF has added roughly 6.10% so far, and was up about 15.11% over the last 12 months (as of 05/29/2024). FGD has traded between $19.81 and $23.93 in this past 52-week period.
FGD has a beta of 0.93 and standard deviation of 15.71% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 105 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Dow Jones Global Select Dividend ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $18.66 billion in assets, Vanguard Total World Stock ETF has $36.49 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 Broad Developed 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.