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Is ProShares Russell 2000 Dividend Growers ETF (SMDV) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Small Cap Value category of the market, the ProShares Russell 2000 Dividend Growers ETF (SMDV - Free Report) is a smart beta exchange traded fund launched on 02/03/2015.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $907.09 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Value. SMDV is managed by Proshares. Before fees and expenses, SMDV seeks to match the performance of the Russell 2000 Dividend Growth Index.
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
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.
Operating expenses on an annual basis are 0.40% for SMDV, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 2.38%.
Performance and Risk
Year-to-date, the ProShares Russell 2000 Dividend Growers ETF return is roughly 5.43% so far, and is up about 2.52% over the last 12 months (as of 03/01/2023). SMDV has traded between $55.50 and $66.96 in this past 52-week period.
The ETF has a beta of 0.79 and standard deviation of 28.92% for the trailing three-year period, making it a medium risk choice in the space. With about 98 holdings, it effectively diversifies company-specific risk.
Alternatives
ProShares Russell 2000 Dividend Growers ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $23.64 billion in assets, Vanguard Dividend Appreciation ETF has $64.25 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?
Designed to provide broad exposure to the Style Box - Small Cap Value category of the market, the ProShares Russell 2000 Dividend Growers ETF (SMDV - Free Report) is a smart beta exchange traded fund launched on 02/03/2015.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $907.09 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Value. SMDV is managed by Proshares. Before fees and expenses, SMDV seeks to match the performance of the Russell 2000 Dividend Growth Index.
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
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.
Operating expenses on an annual basis are 0.40% for SMDV, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 2.38%.
Performance and Risk
Year-to-date, the ProShares Russell 2000 Dividend Growers ETF return is roughly 5.43% so far, and is up about 2.52% over the last 12 months (as of 03/01/2023). SMDV has traded between $55.50 and $66.96 in this past 52-week period.
The ETF has a beta of 0.79 and standard deviation of 28.92% for the trailing three-year period, making it a medium risk choice in the space. With about 98 holdings, it effectively diversifies company-specific risk.
Alternatives
ProShares Russell 2000 Dividend Growers ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $23.64 billion in assets, Vanguard Dividend Appreciation ETF has $64.25 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.