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 Core High Dividend ETF (HDV) a Strong ETF Right Now?
Read MoreHide Full Article
The iShares Core High Dividend ETF (HDV - Free Report) was launched on 03/29/2011, 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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
HDV is managed by Blackrock, and this fund has amassed over $10.45 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. HDV seeks to match the performance of the Morningstar Dividend Yield Focus Index before fees and expenses.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
HDV's 12-month trailing dividend yield is 4.13%.
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 26.10% of the portfolio, the fund has heaviest allocation to the Healthcare sector; Energy and Financials round out the top three.
When you look at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 8.54% of the fund's total assets, followed by Johnson & Johnson (JNJ - Free Report) and Verizon Communications Inc (VZ - Free Report) .
The top 10 holdings account for about 39.62% of total assets under management.
Performance and Risk
The ETF has lost about -0.45% and is up about 1.44% so far this year and in the past one year (as of 08/24/2023), respectively. HDV has traded between $91.29 and $108.19 during this last 52-week period.
HDV has a beta of 0.81 and standard deviation of 14.59% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 82 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 $49.99 billion in assets, Vanguard Value ETF has $100.39 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is iShares Core High Dividend ETF (HDV) a Strong ETF Right Now?
The iShares Core High Dividend ETF (HDV - Free Report) was launched on 03/29/2011, 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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
HDV is managed by Blackrock, and this fund has amassed over $10.45 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. HDV seeks to match the performance of the Morningstar Dividend Yield Focus Index before fees and expenses.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
HDV's 12-month trailing dividend yield is 4.13%.
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 26.10% of the portfolio, the fund has heaviest allocation to the Healthcare sector; Energy and Financials round out the top three.
When you look at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 8.54% of the fund's total assets, followed by Johnson & Johnson (JNJ - Free Report) and Verizon Communications Inc (VZ - Free Report) .
The top 10 holdings account for about 39.62% of total assets under management.
Performance and Risk
The ETF has lost about -0.45% and is up about 1.44% so far this year and in the past one year (as of 08/24/2023), respectively. HDV has traded between $91.29 and $108.19 during this last 52-week period.
HDV has a beta of 0.81 and standard deviation of 14.59% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 82 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 $49.99 billion in assets, Vanguard Value ETF has $100.39 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.