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Is First Trust Value Line Dividend ETF (FVD) a Strong ETF Right Now?
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Launched on 08/19/2003, the First Trust Value Line Dividend ETF (FVD - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $10.64 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. FVD is managed by First Trust Advisors. Before fees and expenses, FVD seeks to match the performance of the Value Line Dividend Index.
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.
Operating expenses on an annual basis are 0.65% for this ETF, which makes it one of the most expensive products in the space.
FVD's 12-month trailing dividend yield is 2.34%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
FVD's heaviest allocation is in the Utilities sector, which is about 21.50% of the portfolio. Its Industrials and Consumer Staples round out the top three.
When you look at individual holdings, Erie Indemnity Company (ERIE - Free Report) accounts for about 0.69% of the fund's total assets, followed by Abbvie Inc. (ABBV - Free Report) and The J.m. Smucker Company (SJM - Free Report) .
FVD's top 10 holdings account for about 6.61% of its total assets under management.
Performance and Risk
Year-to-date, the First Trust Value Line Dividend ETF has lost about -0.30% so far, and is up roughly 0.63% over the last 12 months (as of 01/16/2024). FVD has traded between $36.09 and $41.37 in this past 52-week period.
The ETF has a beta of 0.80 and standard deviation of 13.64% for the trailing three-year period, making it a medium risk choice in the space. With about 162 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Value Line 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 $53.16 billion in assets, Vanguard Value ETF has $106.02 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 First Trust Value Line Dividend ETF (FVD) a Strong ETF Right Now?
Launched on 08/19/2003, the First Trust Value Line Dividend ETF (FVD - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $10.64 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. FVD is managed by First Trust Advisors. Before fees and expenses, FVD seeks to match the performance of the Value Line Dividend Index.
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.
Operating expenses on an annual basis are 0.65% for this ETF, which makes it one of the most expensive products in the space.
FVD's 12-month trailing dividend yield is 2.34%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
FVD's heaviest allocation is in the Utilities sector, which is about 21.50% of the portfolio. Its Industrials and Consumer Staples round out the top three.
When you look at individual holdings, Erie Indemnity Company (ERIE - Free Report) accounts for about 0.69% of the fund's total assets, followed by Abbvie Inc. (ABBV - Free Report) and The J.m. Smucker Company (SJM - Free Report) .
FVD's top 10 holdings account for about 6.61% of its total assets under management.
Performance and Risk
Year-to-date, the First Trust Value Line Dividend ETF has lost about -0.30% so far, and is up roughly 0.63% over the last 12 months (as of 01/16/2024). FVD has traded between $36.09 and $41.37 in this past 52-week period.
The ETF has a beta of 0.80 and standard deviation of 13.64% for the trailing three-year period, making it a medium risk choice in the space. With about 162 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Value Line 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 $53.16 billion in assets, Vanguard Value ETF has $106.02 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.