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 Quick QuoteSDVY - Free Report) is a passively managed exchange traded fund launched on November 1, 2017.

The fund is sponsored by First Trust Advisors. It has amassed assets over $10.88 billion, making it one of the largest ETFs attempting to match the Mid Cap Value segment of the US equity market.

Why Mid Cap Value

Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus, companies that fall under this category provide a stable and growth-heavy investment.

While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.

Costs

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 counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.58%, making it one of the more expensive products in the space.

It has a 12-month trailing dividend yield of 1.02%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector -- about 34.8% of the portfolio. Industrials and Consumer Discretionary round out the top three.

Looking at individual holdings, National Healthcare Corporation (NHC) accounts for about 1.22% of total assets, followed by First Bancorp. (FBP) and Interactive Brokers Group, Inc. (class A) (IBKR).

The top 10 holdings account for about 10.5% 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 return is roughly 7.48% so far this year and is up about 9.86% in the last one year (as of 10/08/2026). In the past 52-week period, it has traded between $36.43 and $44.94.

The ETF has a beta of 1.01 and standard deviation of 18.41% for the trailing three-year period. With about 173 holdings, it effectively diversifies company-specific risk.

Alternatives

First Trust SMID Cap Rising Dividend Achievers ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SDVY is a great option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Russell Mid-Cap Value ETF (IWS) and the Vanguard Morningstar Mid-Cap Value ETF (VOE) track a similar index. While iShares Russell Mid-Cap Value ETF has $15.07 billion in assets, Vanguard Morningstar Mid-Cap Value ETF has $23.19 billion. IWS has an expense ratio of 0.23% and VOE charges 0.05%.

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.