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Should First Trust Value Line Dividend ETF (FVD) Be on Your Investing Radar?
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Launched on 08/19/2003, the First Trust Value Line Dividend ETF (FVD - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by First Trust Advisors. It has amassed assets over $9.39 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
Companies that find themselves in the large cap category 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.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.60%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 2.14%.
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.
This ETF has heaviest allocation to the Utilities sector--about 19.90% of the portfolio. Industrials and Consumer Staples round out the top three.
Looking at individual holdings, Genpact Limited (G - Free Report) accounts for about 0.54% of total assets, followed by Johnson Controls International Plc (JCI - Free Report) and Starbucks Corporation (SBUX - Free Report) .
The top 10 holdings account for about 5.05% of total assets under management.
Performance and Risk
FVD seeks to match the performance of the Value Line Dividend Index before fees and expenses. The Value Line Dividend Index is a modified equal dollar weighted index comprised of U.S. exchange listed securities of companies that pay above-average dividends and have potential for capital appreciation.
The ETF return is roughly 3.99% so far this year and was up about 11.50% in the last one year (as of 03/11/2025). In the past 52-week period, it has traded between $39.94 and $46.70.
The ETF has a beta of 0.78 and standard deviation of 13.14% for the trailing three-year period, making it a medium risk choice in the space. With about 225 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Value Line 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, FVD 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 $70.19 billion in assets, Vanguard Value ETF has $132.79 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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 First Trust Value Line Dividend ETF (FVD) Be on Your Investing Radar?
Launched on 08/19/2003, the First Trust Value Line Dividend ETF (FVD - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by First Trust Advisors. It has amassed assets over $9.39 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
Companies that find themselves in the large cap category 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.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.60%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 2.14%.
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.
This ETF has heaviest allocation to the Utilities sector--about 19.90% of the portfolio. Industrials and Consumer Staples round out the top three.
Looking at individual holdings, Genpact Limited (G - Free Report) accounts for about 0.54% of total assets, followed by Johnson Controls International Plc (JCI - Free Report) and Starbucks Corporation (SBUX - Free Report) .
The top 10 holdings account for about 5.05% of total assets under management.
Performance and Risk
FVD seeks to match the performance of the Value Line Dividend Index before fees and expenses. The Value Line Dividend Index is a modified equal dollar weighted index comprised of U.S. exchange listed securities of companies that pay above-average dividends and have potential for capital appreciation.
The ETF return is roughly 3.99% so far this year and was up about 11.50% in the last one year (as of 03/11/2025). In the past 52-week period, it has traded between $39.94 and $46.70.
The ETF has a beta of 0.78 and standard deviation of 13.14% for the trailing three-year period, making it a medium risk choice in the space. With about 225 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Value Line 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, FVD 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 $70.19 billion in assets, Vanguard Value ETF has $132.79 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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.