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Is ProShares Russell 2000 Dividend Growers ETF (SMDV) a Strong ETF Right Now?
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Launched on 02/03/2015, the ProShares Russell 2000 Dividend Growers ETF (SMDV - Free Report) is a smart beta exchange traded fund offering 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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
SMDV is managed by Proshares, and this fund has amassed over $721.92 million, which makes 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
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.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.14%.
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.
SMDV's heaviest allocation is in the Financials sector, which is about 33.80% of the portfolio. Its Industrials and Utilities round out the top three.
Looking at individual holdings, Cogent Communications Holdin (CCOI - Free Report) accounts for about 1.31% of total assets, followed by S & T Bancorp Inc (STBA - Free Report) and Orrstown Finl Services Inc (ORRF - Free Report) .
The top 10 holdings account for about 10.97% of total assets under management.
Performance and Risk
So far this year, SMDV has added roughly 7.94%, and it's up approximately 24.32% in the last one year (as of 09/25/2024). During this past 52-week period, the fund has traded between $53.56 and $71.27.
The ETF has a beta of 0.81 and standard deviation of 19.03% for the trailing three-year period, making it a medium risk choice in the space. With about 100 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 $30.36 billion in assets, Vanguard Dividend Appreciation ETF has $85.76 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?
Launched on 02/03/2015, the ProShares Russell 2000 Dividend Growers ETF (SMDV - Free Report) is a smart beta exchange traded fund offering 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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
SMDV is managed by Proshares, and this fund has amassed over $721.92 million, which makes 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
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.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.14%.
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.
SMDV's heaviest allocation is in the Financials sector, which is about 33.80% of the portfolio. Its Industrials and Utilities round out the top three.
Looking at individual holdings, Cogent Communications Holdin (CCOI - Free Report) accounts for about 1.31% of total assets, followed by S & T Bancorp Inc (STBA - Free Report) and Orrstown Finl Services Inc (ORRF - Free Report) .
The top 10 holdings account for about 10.97% of total assets under management.
Performance and Risk
So far this year, SMDV has added roughly 7.94%, and it's up approximately 24.32% in the last one year (as of 09/25/2024). During this past 52-week period, the fund has traded between $53.56 and $71.27.
The ETF has a beta of 0.81 and standard deviation of 19.03% for the trailing three-year period, making it a medium risk choice in the space. With about 100 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 $30.36 billion in assets, Vanguard Dividend Appreciation ETF has $85.76 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.