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Is First Trust STOXX European Select Dividend ETF (FDD) a Strong ETF Right Now?
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Making its debut on 08/27/2007, smart beta exchange traded fund First Trust STOXX European Select Dividend ETF (FDD - Free Report) provides investors broad exposure to the European Equity ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors, and has been able to amass over $606.5 million, which makes it one of the average sized ETFs in the European Equity ETFs. FDD seeks to match the performance of the STOXX Europe Select Dividend 30 Index before fees and expenses.
The STOXX Europe Select Dividend 30 Index consists of 30 high dividend-yielding securities selected from the STOXX Europe 600 Index.
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.
Annual operating expenses for FDD are 0.59%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.79%.
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.
Taking into account individual holdings, Aker Bp Asa (AKRBP.NO) accounts for about 5.92% of the fund's total assets, followed by Legal & General Group Plc (LGEN.LN) and Taylor Wimpey Plc (TW/.LN).
Its top 10 holdings account for approximately 43.77% of FDD's total assets under management.
Performance and Risk
Year-to-date, the First Trust STOXX European Select Dividend ETF has gained about 39.57% so far, and it's up approximately 31.95% over the last 12 months (as of 07/31/2025). FDD has traded between $11.07 and $16.13 in this past 52-week period.
The ETF has a beta of 0.84 and standard deviation of 18.05% for the trailing three-year period, making it a medium risk choice in the space. With about 33 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust STOXX European Select Dividend ETF is not a suitable option for investors seeking to outperform the European Equity ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
iShares MSCI Eurozone ETF (EZU) tracks MSCI EMU Index and the Vanguard FTSE Europe ETF (VGK) tracks FTSE Developed Europe All Cap Index. iShares MSCI Eurozone ETF has $7.89 billion in assets, Vanguard FTSE Europe ETF has $25.7 billion. EZU has an expense ratio of 0.51% and VGK changes 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 European Equity ETFs
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 STOXX European Select Dividend ETF (FDD) a Strong ETF Right Now?
Making its debut on 08/27/2007, smart beta exchange traded fund First Trust STOXX European Select Dividend ETF (FDD - Free Report) provides investors broad exposure to the European Equity ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors, and has been able to amass over $606.5 million, which makes it one of the average sized ETFs in the European Equity ETFs. FDD seeks to match the performance of the STOXX Europe Select Dividend 30 Index before fees and expenses.
The STOXX Europe Select Dividend 30 Index consists of 30 high dividend-yielding securities selected from the STOXX Europe 600 Index.
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.
Annual operating expenses for FDD are 0.59%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.79%.
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.
Taking into account individual holdings, Aker Bp Asa (AKRBP.NO) accounts for about 5.92% of the fund's total assets, followed by Legal & General Group Plc (LGEN.LN) and Taylor Wimpey Plc (TW/.LN).
Its top 10 holdings account for approximately 43.77% of FDD's total assets under management.
Performance and Risk
Year-to-date, the First Trust STOXX European Select Dividend ETF has gained about 39.57% so far, and it's up approximately 31.95% over the last 12 months (as of 07/31/2025). FDD has traded between $11.07 and $16.13 in this past 52-week period.
The ETF has a beta of 0.84 and standard deviation of 18.05% for the trailing three-year period, making it a medium risk choice in the space. With about 33 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust STOXX European Select Dividend ETF is not a suitable option for investors seeking to outperform the European Equity ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
iShares MSCI Eurozone ETF (EZU) tracks MSCI EMU Index and the Vanguard FTSE Europe ETF (VGK) tracks FTSE Developed Europe All Cap Index. iShares MSCI Eurozone ETF has $7.89 billion in assets, Vanguard FTSE Europe ETF has $25.7 billion. EZU has an expense ratio of 0.51% and VGK changes 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 European Equity ETFs
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.