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Should iShares Core High Dividend ETF (HDV) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the iShares Core High Dividend ETF (HDV - Free Report) , a passively managed exchange traded fund launched on 03/29/2011.
The fund is sponsored by Blackrock. It has amassed assets over $10.93 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 3.29%.
Sector Exposure and Top Holdings
ETFs offer a 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 to the Energy sector--about 25.80% of the portfolio. Consumer Staples and Healthcare round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 9.92% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Abbvie Inc (ABBV - Free Report) .
The top 10 holdings account for about 58.31% of total assets under management.
Performance and Risk
HDV seeks to match the performance of the Morningstar Dividend Yield Focus Index before fees and expenses. The Morningstar Dividend Yield Focus Index offers exposure to high quality U.S. domiciled companies that have had strong financial health and an ability to sustain above average dividend payouts.
The ETF return is roughly 15.47% so far this year and is up about 16.53% in the last one year (as of 08/20/2024). In the past 52-week period, it has traded between $93.77 and $116.
The ETF has a beta of 0.79 and standard deviation of 13.41% for the trailing three-year period, making it a medium risk choice in the space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Core High Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, HDV is a sufficient option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Schwab U.S. Dividend Equity ETF (SCHD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $58.67 billion in assets, Vanguard Value ETF has $122.45 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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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Should iShares Core High Dividend ETF (HDV) Be on Your Investing Radar?
If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the iShares Core High Dividend ETF (HDV - Free Report) , a passively managed exchange traded fund launched on 03/29/2011.
The fund is sponsored by Blackrock. It has amassed assets over $10.93 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 3.29%.
Sector Exposure and Top Holdings
ETFs offer a 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 to the Energy sector--about 25.80% of the portfolio. Consumer Staples and Healthcare round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 9.92% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Abbvie Inc (ABBV - Free Report) .
The top 10 holdings account for about 58.31% of total assets under management.
Performance and Risk
HDV seeks to match the performance of the Morningstar Dividend Yield Focus Index before fees and expenses. The Morningstar Dividend Yield Focus Index offers exposure to high quality U.S. domiciled companies that have had strong financial health and an ability to sustain above average dividend payouts.
The ETF return is roughly 15.47% so far this year and is up about 16.53% in the last one year (as of 08/20/2024). In the past 52-week period, it has traded between $93.77 and $116.
The ETF has a beta of 0.79 and standard deviation of 13.41% for the trailing three-year period, making it a medium risk choice in the space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Core High Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, HDV is a sufficient option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Schwab U.S. Dividend Equity ETF (SCHD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $58.67 billion in assets, Vanguard Value ETF has $122.45 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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.