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Should First Trust SMID Cap Rising Dividend Achievers ETF (SDVY) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the First Trust SMID Cap Rising Dividend Achievers ETF (SDVY - Free Report) is a passively managed exchange traded fund launched on 11/01/2017.
The fund is sponsored by First Trust Advisors. It has amassed assets over $8.05 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. These types of companies, then, have a good balance of stability and growth potential.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.60%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 1.54%.
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 Financials sector--about 32.80% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Select Water Solutions, Inc. (class A) (WTTR - Free Report) accounts for about 1.10% of total assets, followed by Sm Energy Company (SM - Free Report) and Hf Sinclair Corp. (DINO - Free Report) .
The top 10 holdings account for about 10.89% of total assets under management.
Performance and Risk
SDVY seeks to match the performance of the NASDAQ US Small Mid Cap Rising Dividend Achievers Index before fees and expenses. The NASDAQ US Small Mid Cap Rising Dividend Achievers Index is composed of the securities of 100 small and mid-cap companies with a history of raising their dividends and exhibit the characteristics to continue to do so in the future.
The ETF has added about 4.07% so far this year and it's up approximately 19.17% in the last one year (as of 01/16/2025). In the past 52-week period, it has traded between $31.21 and $40.33.
The ETF has a beta of 1.19 and standard deviation of 22.02% for the trailing three-year period. With about 96 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust SMID Cap Rising Dividend Achievers ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SDVY is a good option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell Mid-Cap Value ETF (IWS - Free Report) and the Vanguard Mid-Cap Value ETF (VOE - Free Report) track a similar index. While iShares Russell Mid-Cap Value ETF has $13.89 billion in assets, Vanguard Mid-Cap Value ETF has $17.63 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
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 SMID Cap Rising Dividend Achievers ETF (SDVY) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the First Trust SMID Cap Rising Dividend Achievers ETF (SDVY - Free Report) is a passively managed exchange traded fund launched on 11/01/2017.
The fund is sponsored by First Trust Advisors. It has amassed assets over $8.05 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. These types of companies, then, have a good balance of stability and growth potential.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.60%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 1.54%.
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 Financials sector--about 32.80% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Select Water Solutions, Inc. (class A) (WTTR - Free Report) accounts for about 1.10% of total assets, followed by Sm Energy Company (SM - Free Report) and Hf Sinclair Corp. (DINO - Free Report) .
The top 10 holdings account for about 10.89% of total assets under management.
Performance and Risk
SDVY seeks to match the performance of the NASDAQ US Small Mid Cap Rising Dividend Achievers Index before fees and expenses. The NASDAQ US Small Mid Cap Rising Dividend Achievers Index is composed of the securities of 100 small and mid-cap companies with a history of raising their dividends and exhibit the characteristics to continue to do so in the future.
The ETF has added about 4.07% so far this year and it's up approximately 19.17% in the last one year (as of 01/16/2025). In the past 52-week period, it has traded between $31.21 and $40.33.
The ETF has a beta of 1.19 and standard deviation of 22.02% for the trailing three-year period. With about 96 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust SMID Cap Rising Dividend Achievers ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SDVY is a good option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell Mid-Cap Value ETF (IWS - Free Report) and the Vanguard Mid-Cap Value ETF (VOE - Free Report) track a similar index. While iShares Russell Mid-Cap Value ETF has $13.89 billion in assets, Vanguard Mid-Cap Value ETF has $17.63 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
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.