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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) made its debut on 08/19/2003, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
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
The fund is managed by First Trust Advisors, and has been able to amass over $10.22 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. 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.
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.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.65%.
The fund has a 12-month trailing dividend yield of 2.28%.
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 20.70% of the portfolio. Its Industrials 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) .
Its top 10 holdings account for approximately 6.61% of FVD's total assets under management.
Performance and Risk
The ETF has gained about 2.49% and was up about 9.92% so far this year and in the past one year (as of 03/20/2024), respectively. FVD has traded between $36.09 and $41.73 during this last 52-week period.
FVD has a beta of 0.79 and standard deviation of 13.50% for the trailing three-year period, which makes the fund 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 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $64.73 billion in assets, Vanguard Value ETF has $113.53 billion. SCHD has an expense ratio of 0.06% 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) made its debut on 08/19/2003, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
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
The fund is managed by First Trust Advisors, and has been able to amass over $10.22 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. 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.
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.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.65%.
The fund has a 12-month trailing dividend yield of 2.28%.
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 20.70% of the portfolio. Its Industrials 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) .
Its top 10 holdings account for approximately 6.61% of FVD's total assets under management.
Performance and Risk
The ETF has gained about 2.49% and was up about 9.92% so far this year and in the past one year (as of 03/20/2024), respectively. FVD has traded between $36.09 and $41.73 during this last 52-week period.
FVD has a beta of 0.79 and standard deviation of 13.50% for the trailing three-year period, which makes the fund 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 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $64.73 billion in assets, Vanguard Value ETF has $113.53 billion. SCHD has an expense ratio of 0.06% 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.