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Should First Trust Value Line Dividend ETF (FVD) Be on Your Investing Radar?
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Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the First Trust Value Line Dividend ETF (FVD - Free Report) is a passively managed exchange traded fund launched on 08/19/2003.
The fund is sponsored by First Trust Advisors. It has amassed assets over $10.22 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.65%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 2.32%.
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.
This ETF has heaviest allocation to the Industrials sector--about 20.40% of the portfolio. Utilities and Consumer Staples round out the top three.
Looking at individual holdings, Erie Indemnity Company (ERIE - Free Report) accounts for about 0.69% of total assets, followed by Abbvie Inc. (ABBV - Free Report) and The J.m. Smucker Company (SJM - Free Report) .
The top 10 holdings account for about 6.61% of total assets under management.
Performance and Risk
FVD 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.
The ETF return is roughly 0.91% so far this year and was up about 4.69% in the last one year (as of 02/28/2024). In the past 52-week period, it has traded between $36.09 and $41.11.
The ETF has a beta of 0.79 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 holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FVD is an outstanding option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $53.66 billion in assets, Vanguard Value ETF has $110.09 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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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Should First Trust Value Line Dividend ETF (FVD) Be on Your Investing Radar?
Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the First Trust Value Line Dividend ETF (FVD - Free Report) is a passively managed exchange traded fund launched on 08/19/2003.
The fund is sponsored by First Trust Advisors. It has amassed assets over $10.22 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.65%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 2.32%.
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.
This ETF has heaviest allocation to the Industrials sector--about 20.40% of the portfolio. Utilities and Consumer Staples round out the top three.
Looking at individual holdings, Erie Indemnity Company (ERIE - Free Report) accounts for about 0.69% of total assets, followed by Abbvie Inc. (ABBV - Free Report) and The J.m. Smucker Company (SJM - Free Report) .
The top 10 holdings account for about 6.61% of total assets under management.
Performance and Risk
FVD 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.
The ETF return is roughly 0.91% so far this year and was up about 4.69% in the last one year (as of 02/28/2024). In the past 52-week period, it has traded between $36.09 and $41.11.
The ETF has a beta of 0.79 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 holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FVD is an outstanding option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $53.66 billion in assets, Vanguard Value ETF has $110.09 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.