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Is iShares Core High Dividend ETF (HDV) a Strong ETF Right Now?
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Launched on 03/29/2011, the iShares Core High Dividend ETF (HDV - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $12.33 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. HDV is managed by Blackrock. This particular fund, before fees and expenses, seeks to match the performance of the Morningstar Dividend Yield Focus Index.
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.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.08% for HDV, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 3.17%.
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.
HDV's heaviest allocation is in the Healthcare sector, which is about 25.70% of the portfolio. Its Energy and Consumer Staples round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 9.84% of total assets, followed by Chevron Corp (CVX - Free Report) and Verizon Communications Inc (VZ - Free Report) .
The top 10 holdings account for about 55.62% of total assets under management.
Performance and Risk
So far this year, HDV has added roughly 6.66%, and it's up approximately 11.84% in the last one year (as of 05/25/2022). During this past 52-week period, the fund has traded between $94.26 and $109.92.
The fund has a beta of 0.82 and standard deviation of 22.21% for the trailing three-year period, which makes HDV a medium risk choice in this particular space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Core High Dividend 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.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $53.84 billion in assets, Vanguard Value ETF has $97.91 billion. IWD has an expense ratio of 0.19% 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 iShares Core High Dividend ETF (HDV) a Strong ETF Right Now?
Launched on 03/29/2011, the iShares Core High Dividend ETF (HDV - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $12.33 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. HDV is managed by Blackrock. This particular fund, before fees and expenses, seeks to match the performance of the Morningstar Dividend Yield Focus Index.
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.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.08% for HDV, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 3.17%.
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.
HDV's heaviest allocation is in the Healthcare sector, which is about 25.70% of the portfolio. Its Energy and Consumer Staples round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 9.84% of total assets, followed by Chevron Corp (CVX - Free Report) and Verizon Communications Inc (VZ - Free Report) .
The top 10 holdings account for about 55.62% of total assets under management.
Performance and Risk
So far this year, HDV has added roughly 6.66%, and it's up approximately 11.84% in the last one year (as of 05/25/2022). During this past 52-week period, the fund has traded between $94.26 and $109.92.
The fund has a beta of 0.82 and standard deviation of 22.21% for the trailing three-year period, which makes HDV a medium risk choice in this particular space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Core High Dividend 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.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $53.84 billion in assets, Vanguard Value ETF has $97.91 billion. IWD has an expense ratio of 0.19% 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.