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Is ProShares Russell 2000 Dividend Growers ETF (SMDV) a Strong ETF Right Now?
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A smart beta exchange traded fund, the ProShares Russell 2000 Dividend Growers ETF (SMDV - Free Report) debuted on 02/03/2015, and offers broad exposure to the Style Box - Small 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.
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.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is managed by Proshares. SMDV has been able to amass assets over $761.44 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. SMDV seeks to match the performance of the Russell 2000 Dividend Growth Index before fees and expenses.
The Russell 2000 Dividend Growth Index targets companies that are currently members of the Russell 2000 Index and have increased dividend payments each year for at least 10 years.
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.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.78%.
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.
SMDV's heaviest allocation is in the Financials sector, which is about 30.60% of the portfolio. Its Industrials and Utilities round out the top three.
When you look at individual holdings, Kaiser Aluminum Corp (KALU - Free Report) accounts for about 1.28% of the fund's total assets, followed by Atrion Corporation and Hyster-Yale Materials (HY - Free Report) .
The top 10 holdings account for about 9.52% of total assets under management.
Performance and Risk
The ETF has lost about -2.32% and it's up approximately 11.24% so far this year and in the past one year (as of 05/24/2024), respectively. SMDV has traded between $53.56 and $66.20 during this last 52-week period.
SMDV has a beta of 0.81 and standard deviation of 18.64% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
ProShares Russell 2000 Dividend Growers ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $27.15 billion in assets, Vanguard Dividend Appreciation ETF has $78.24 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
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 - Small 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 ProShares Russell 2000 Dividend Growers ETF (SMDV) a Strong ETF Right Now?
A smart beta exchange traded fund, the ProShares Russell 2000 Dividend Growers ETF (SMDV - Free Report) debuted on 02/03/2015, and offers broad exposure to the Style Box - Small 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.
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.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is managed by Proshares. SMDV has been able to amass assets over $761.44 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. SMDV seeks to match the performance of the Russell 2000 Dividend Growth Index before fees and expenses.
The Russell 2000 Dividend Growth Index targets companies that are currently members of the Russell 2000 Index and have increased dividend payments each year for at least 10 years.
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.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.78%.
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.
SMDV's heaviest allocation is in the Financials sector, which is about 30.60% of the portfolio. Its Industrials and Utilities round out the top three.
When you look at individual holdings, Kaiser Aluminum Corp (KALU - Free Report) accounts for about 1.28% of the fund's total assets, followed by Atrion Corporation and Hyster-Yale Materials (HY - Free Report) .
The top 10 holdings account for about 9.52% of total assets under management.
Performance and Risk
The ETF has lost about -2.32% and it's up approximately 11.24% so far this year and in the past one year (as of 05/24/2024), respectively. SMDV has traded between $53.56 and $66.20 during this last 52-week period.
SMDV has a beta of 0.81 and standard deviation of 18.64% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
ProShares Russell 2000 Dividend Growers ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $27.15 billion in assets, Vanguard Dividend Appreciation ETF has $78.24 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
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 - Small 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.