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Is iShares Select Dividend ETF (DVY) a Strong ETF Right Now?
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The iShares Select Dividend ETF (DVY - Free Report) made its debut on 11/03/2003, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $21.01 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. DVY seeks to match the performance of the Dow Jones U.S. Select Dividend Index before fees and expenses.
The Dow Jones U.S. Select Dividend Index measures the performance of a selected group of equity securities issued by companies that have provided relatively high dividend yields on a consistent basis over time.
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 0.38% for DVY, making it on par with most peer products in the space.
DVY's 12-month trailing dividend yield is 3.12%.
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.
For DVY, it has heaviest allocation in the Utilities sector --about 29.10% of the portfolio --while Financials and Energy round out the top three.
When you look at individual holdings, Oneok Inc (OKE - Free Report) accounts for about 2.63% of the fund's total assets, followed by Altria Group Inc (MO - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
DVY's top 10 holdings account for about 19.65% of its total assets under management.
Performance and Risk
The ETF has lost about -4.13% so far this year and was up about 3.49% in the last one year (as of 07/14/2022). In the past 52-week period, it has traded between $112.53 and $132.14.
The ETF has a beta of 0.88 and standard deviation of 26% for the trailing three-year period, making it a medium risk choice in the space. With about 108 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Select Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $50.56 billion in assets, Vanguard Value ETF has $92.75 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 Select Dividend ETF (DVY) a Strong ETF Right Now?
The iShares Select Dividend ETF (DVY - Free Report) made its debut on 11/03/2003, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $21.01 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. DVY seeks to match the performance of the Dow Jones U.S. Select Dividend Index before fees and expenses.
The Dow Jones U.S. Select Dividend Index measures the performance of a selected group of equity securities issued by companies that have provided relatively high dividend yields on a consistent basis over time.
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 0.38% for DVY, making it on par with most peer products in the space.
DVY's 12-month trailing dividend yield is 3.12%.
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.
For DVY, it has heaviest allocation in the Utilities sector --about 29.10% of the portfolio --while Financials and Energy round out the top three.
When you look at individual holdings, Oneok Inc (OKE - Free Report) accounts for about 2.63% of the fund's total assets, followed by Altria Group Inc (MO - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
DVY's top 10 holdings account for about 19.65% of its total assets under management.
Performance and Risk
The ETF has lost about -4.13% so far this year and was up about 3.49% in the last one year (as of 07/14/2022). In the past 52-week period, it has traded between $112.53 and $132.14.
The ETF has a beta of 0.88 and standard deviation of 26% for the trailing three-year period, making it a medium risk choice in the space. With about 108 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Select Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $50.56 billion in assets, Vanguard Value ETF has $92.75 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.