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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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Proshares, and has been able to amass over $644.04 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Value. SMDV, before fees and expenses, seeks to match the performance of the Russell 2000 Dividend Growth Index.
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 SMDV are 0.40%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.96%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector - about 31% of the portfolio. Industrials and Utilities round out the top three.
When you look at individual holdings, Caretrust Reit Inc (CTRE - Free Report) accounts for about 1.21% of the fund's total assets, followed by Txnm Energy Inc (TXNM - Free Report) and Badger Meter Inc (BMI - Free Report) .
Its top 10 holdings account for approximately 10.44% of SMDV's total assets under management.
Performance and Risk
Year-to-date, the ProShares Russell 2000 Dividend Growers ETF has lost about -5.11% so far, and is up roughly 3.38% over the last 12 months (as of 06/03/2025). SMDV has traded between $58.95 and $75.88 in this past 52-week period.
SMDV has a beta of 0.83 and standard deviation of 19.74% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 99 holdings, it effectively diversifies company-specific risk.
Alternatives
ProShares Russell 2000 Dividend Growers ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $31.06 billion in assets, Vanguard Dividend Appreciation ETF has $89.67 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.05%.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Proshares, and has been able to amass over $644.04 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Value. SMDV, before fees and expenses, seeks to match the performance of the Russell 2000 Dividend Growth Index.
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 SMDV are 0.40%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.96%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector - about 31% of the portfolio. Industrials and Utilities round out the top three.
When you look at individual holdings, Caretrust Reit Inc (CTRE - Free Report) accounts for about 1.21% of the fund's total assets, followed by Txnm Energy Inc (TXNM - Free Report) and Badger Meter Inc (BMI - Free Report) .
Its top 10 holdings account for approximately 10.44% of SMDV's total assets under management.
Performance and Risk
Year-to-date, the ProShares Russell 2000 Dividend Growers ETF has lost about -5.11% so far, and is up roughly 3.38% over the last 12 months (as of 06/03/2025). SMDV has traded between $58.95 and $75.88 in this past 52-week period.
SMDV has a beta of 0.83 and standard deviation of 19.74% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 99 holdings, it effectively diversifies company-specific risk.
Alternatives
ProShares Russell 2000 Dividend Growers ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $31.06 billion in assets, Vanguard Dividend Appreciation ETF has $89.67 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.05%.
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.