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Is First Trust Rising Dividend Achievers ETF (RDVY) a Strong ETF Right Now?
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The First Trust Rising Dividend Achievers ETF (RDVY - Free Report) was launched on 01/07/2014, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
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
The fund is sponsored by First Trust Advisors. It has amassed assets over $13.44 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. RDVY, before fees and expenses, seeks to match the performance of the NASDAQ US Rising Dividend Achievers Index.
The NASDAQ US Rising Dividend Achievers Index is designed to provide access to a diversified portfolio of companies with a history of paying dividends.
Cost & Other Expenses
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 RDVY are 0.48%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.61%.
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.
RDVY's heaviest allocation is in the Financials sector, which is about 40.90% of the portfolio. Its Information Technology and Energy round out the top three.
When you look at individual holdings, Kla Corporation (KLAC - Free Report) accounts for about 2.27% of the fund's total assets, followed by Jpmorgan Chase & Co. (JPM - Free Report) and Equitable Holdings, Inc. (EQH - Free Report) .
Its top 10 holdings account for approximately 21.74% of RDVY's total assets under management.
Performance and Risk
So far this year, RDVY return is roughly 2.03%, and is up about 14.97% in the last one year (as of 03/04/2025). During this past 52-week period, the fund has traded between $53.05 and $64.37.
The ETF has a beta of 1.12 and standard deviation of 19.36% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Rising Dividend Achievers ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $69.53 billion in assets, Vanguard Value ETF has $134.49 billion. SCHD has an expense ratio of 0.06% 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 Rising Dividend Achievers ETF (RDVY) a Strong ETF Right Now?
The First Trust Rising Dividend Achievers ETF (RDVY - Free Report) was launched on 01/07/2014, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
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
The fund is sponsored by First Trust Advisors. It has amassed assets over $13.44 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. RDVY, before fees and expenses, seeks to match the performance of the NASDAQ US Rising Dividend Achievers Index.
The NASDAQ US Rising Dividend Achievers Index is designed to provide access to a diversified portfolio of companies with a history of paying dividends.
Cost & Other Expenses
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 RDVY are 0.48%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.61%.
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.
RDVY's heaviest allocation is in the Financials sector, which is about 40.90% of the portfolio. Its Information Technology and Energy round out the top three.
When you look at individual holdings, Kla Corporation (KLAC - Free Report) accounts for about 2.27% of the fund's total assets, followed by Jpmorgan Chase & Co. (JPM - Free Report) and Equitable Holdings, Inc. (EQH - Free Report) .
Its top 10 holdings account for approximately 21.74% of RDVY's total assets under management.
Performance and Risk
So far this year, RDVY return is roughly 2.03%, and is up about 14.97% in the last one year (as of 03/04/2025). During this past 52-week period, the fund has traded between $53.05 and $64.37.
The ETF has a beta of 1.12 and standard deviation of 19.36% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Rising Dividend Achievers ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $69.53 billion in assets, Vanguard Value ETF has $134.49 billion. SCHD has an expense ratio of 0.06% 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.