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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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
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
The fund is managed by First Trust Advisors. FVD has been able to amass assets over $9.86 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund 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
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 cousins, other things remaining the same.
Operating expenses on an annual basis are 0.65% for FVD, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.19%.
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.
For FVD, it has heaviest allocation in the Utilities sector --about 21.90% of the portfolio --while Industrials and Consumer Staples round out the top three.
Taking into account individual holdings, Garmin Ltd. (GRMN - Free Report) accounts for about 0.70% of the fund's total assets, followed by Erie Indemnity Company (ERIE - Free Report) and The Kroger Co. (KR - Free Report) .
Its top 10 holdings account for approximately 6.8% of FVD's total assets under management.
Performance and Risk
The ETF has gained about 4.80% and is up roughly 8.39% so far this year and in the past one year (as of 05/21/2024), respectively. FVD has traded between $36.09 and $42.43 during this last 52-week period.
FVD has a beta of 0.79 and standard deviation of 13.41% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 167 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 $56.24 billion in assets, Vanguard Value ETF has $116.73 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
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
The fund is managed by First Trust Advisors. FVD has been able to amass assets over $9.86 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund 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
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 cousins, other things remaining the same.
Operating expenses on an annual basis are 0.65% for FVD, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.19%.
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.
For FVD, it has heaviest allocation in the Utilities sector --about 21.90% of the portfolio --while Industrials and Consumer Staples round out the top three.
Taking into account individual holdings, Garmin Ltd. (GRMN - Free Report) accounts for about 0.70% of the fund's total assets, followed by Erie Indemnity Company (ERIE - Free Report) and The Kroger Co. (KR - Free Report) .
Its top 10 holdings account for approximately 6.8% of FVD's total assets under management.
Performance and Risk
The ETF has gained about 4.80% and is up roughly 8.39% so far this year and in the past one year (as of 05/21/2024), respectively. FVD has traded between $36.09 and $42.43 during this last 52-week period.
FVD has a beta of 0.79 and standard deviation of 13.41% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 167 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 $56.24 billion in assets, Vanguard Value ETF has $116.73 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.