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Is First Trust Value Line Dividend ETF (FVD) a Strong ETF Right Now?
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The First Trust Value Line Dividend ETF (FVD - Free Report) was launched on 08/19/2003, 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?
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.
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
Managed by First Trust Advisors, FVD has amassed assets over $12.35 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund 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.
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 FVD are 0.67%, which makes it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.07%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 21% of the portfolio, the fund has heaviest allocation to the Utilities sector; Consumer Staples and Industrials round out the top three.
Taking into account individual holdings, Taiwan Semiconductor Manufacturing Company Ltd. (adr) (TSM - Free Report) accounts for about 0.65% of the fund's total assets, followed by Cognizant Technology Solutions Corporation (CTSH - Free Report) and Intel Corporation (INTC - Free Report) .
The top 10 holdings account for about 6.28% of total assets under management.
Performance and Risk
So far this year, FVD has gained about 0.58%, and is down about -0.67% in the last one year (as of 03/06/2023). During this past 52-week period, the fund has traded between $35.61 and $43.02.
FVD has a beta of 0.78 and standard deviation of 22.92% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 175 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Value Line 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 $52.64 billion in assets, Vanguard Value ETF has $103.01 billion. IWD has an expense ratio of 0.18% 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 Value Line Dividend ETF (FVD) a Strong ETF Right Now?
The First Trust Value Line Dividend ETF (FVD - Free Report) was launched on 08/19/2003, 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?
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.
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
Managed by First Trust Advisors, FVD has amassed assets over $12.35 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund 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.
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 FVD are 0.67%, which makes it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.07%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 21% of the portfolio, the fund has heaviest allocation to the Utilities sector; Consumer Staples and Industrials round out the top three.
Taking into account individual holdings, Taiwan Semiconductor Manufacturing Company Ltd. (adr) (TSM - Free Report) accounts for about 0.65% of the fund's total assets, followed by Cognizant Technology Solutions Corporation (CTSH - Free Report) and Intel Corporation (INTC - Free Report) .
The top 10 holdings account for about 6.28% of total assets under management.
Performance and Risk
So far this year, FVD has gained about 0.58%, and is down about -0.67% in the last one year (as of 03/06/2023). During this past 52-week period, the fund has traded between $35.61 and $43.02.
FVD has a beta of 0.78 and standard deviation of 22.92% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 175 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Value Line 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 $52.64 billion in assets, Vanguard Value ETF has $103.01 billion. IWD has an expense ratio of 0.18% 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.