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Is First Trust Dow Jones Global Select Dividend Index Fund (FGD) a Hot ETF Right Now?
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Making its debut on 11/21/2007, smart beta exchange traded fund First Trust Dow Jones Global Select Dividend Index Fund (FGD - Free Report) provides investors broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
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
FGD is managed by First Trust Advisors, and this fund has amassed over $450.47 M, which makes it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, FGD seeks to match the performance of the Dow Jones Global Select Dividend Index.
This Index is an indicated annual dividend yield weighted index of 100 stocks selected from the developed-market portion of the Dow Jones World Index.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.58% for FGD, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 4.90%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
When you look at individual holdings, Centurylink, Inc. accounts for about 2.60% of the fund's total assets, followed by Galliford Try Plc (GFRD.LN) and Element Fleet Management Corp. (EFN.CT).
Its top 10 holdings account for approximately 16.72% of FGD's total assets under management.
Performance and Risk
So far this year, FGD has lost about -8.31%, and is down about -5.46% in the last one year (as of 12/07/2018). During this past 52-week period, the fund has traded between $23.11 and $28.07.
The ETF has a beta of 0.83 and standard deviation of 13.96% for the trailing three-year period, making it a low risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Dow Jones Global Select Dividend Index Fund is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares MSCI ACWI ETF (ACWI - Free Report) tracks MSCI All Country World Index and the Vanguard Total World Stock ETF (VT - Free Report) tracks FTSE Global All Cap Index. IShares MSCI ACWI ETF has $9.28 B in assets, Vanguard Total World Stock ETF has $12.26 B. ACWI has an expense ratio of 0.32% and VT charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World 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 Dow Jones Global Select Dividend Index Fund (FGD) a Hot ETF Right Now?
Making its debut on 11/21/2007, smart beta exchange traded fund First Trust Dow Jones Global Select Dividend Index Fund (FGD - Free Report) provides investors broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
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
FGD is managed by First Trust Advisors, and this fund has amassed over $450.47 M, which makes it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, FGD seeks to match the performance of the Dow Jones Global Select Dividend Index.
This Index is an indicated annual dividend yield weighted index of 100 stocks selected from the developed-market portion of the Dow Jones World Index.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.58% for FGD, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 4.90%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
When you look at individual holdings, Centurylink, Inc. accounts for about 2.60% of the fund's total assets, followed by Galliford Try Plc (GFRD.LN) and Element Fleet Management Corp. (EFN.CT).
Its top 10 holdings account for approximately 16.72% of FGD's total assets under management.
Performance and Risk
So far this year, FGD has lost about -8.31%, and is down about -5.46% in the last one year (as of 12/07/2018). During this past 52-week period, the fund has traded between $23.11 and $28.07.
The ETF has a beta of 0.83 and standard deviation of 13.96% for the trailing three-year period, making it a low risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Dow Jones Global Select Dividend Index Fund is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares MSCI ACWI ETF (ACWI - Free Report) tracks MSCI All Country World Index and the Vanguard Total World Stock ETF (VT - Free Report) tracks FTSE Global All Cap Index. IShares MSCI ACWI ETF has $9.28 B in assets, Vanguard Total World Stock ETF has $12.26 B. ACWI has an expense ratio of 0.32% and VT charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World 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.