We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is iShares Select Dividend ETF (DVY) a Strong ETF Right Now?
Read MoreHide Full Article
The iShares Select Dividend ETF (DVY - Free Report) was launched on 11/03/2003, 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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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 $20.06 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Value. DVY is managed by Blackrock. This particular fund, before fees and expenses, seeks to match the performance of the Dow Jones U.S. Select Dividend Index.
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
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 0.38% for DVY, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 3.82%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 28.10% of the portfolio, the fund has heaviest allocation to the Utilities sector; Financials and Consumer Staples round out the top three.
Looking at individual holdings, Altria Group Inc (MO - Free Report) accounts for about 2.44% of total assets, followed by Verizon Communications Inc (VZ - Free Report) and At&t Inc (T - Free Report) .
Its top 10 holdings account for approximately 17.99% of DVY's total assets under management.
Performance and Risk
The ETF has lost about -6.70% and is down about -7.94% so far this year and in the past one year (as of 05/24/2023), respectively. DVY has traded between $107.22 and $131.37 during this last 52-week period.
The fund has a beta of 0.87 and standard deviation of 18.93% for the trailing three-year period, which makes DVY a medium risk choice in this particular space. With about 106 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 $48.84 billion in assets, Vanguard Value ETF has $99.49 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is iShares Select Dividend ETF (DVY) a Strong ETF Right Now?
The iShares Select Dividend ETF (DVY - Free Report) was launched on 11/03/2003, 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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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 $20.06 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Value. DVY is managed by Blackrock. This particular fund, before fees and expenses, seeks to match the performance of the Dow Jones U.S. Select Dividend Index.
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
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 0.38% for DVY, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 3.82%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 28.10% of the portfolio, the fund has heaviest allocation to the Utilities sector; Financials and Consumer Staples round out the top three.
Looking at individual holdings, Altria Group Inc (MO - Free Report) accounts for about 2.44% of total assets, followed by Verizon Communications Inc (VZ - Free Report) and At&t Inc (T - Free Report) .
Its top 10 holdings account for approximately 17.99% of DVY's total assets under management.
Performance and Risk
The ETF has lost about -6.70% and is down about -7.94% so far this year and in the past one year (as of 05/24/2023), respectively. DVY has traded between $107.22 and $131.37 during this last 52-week period.
The fund has a beta of 0.87 and standard deviation of 18.93% for the trailing three-year period, which makes DVY a medium risk choice in this particular space. With about 106 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 $48.84 billion in assets, Vanguard Value ETF has $99.49 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.