Is First Trust Dow Jones Global Select Dividend ETF (FGD) a Strong ETF Right Now?

Making its debut on 11/21/2007, smart beta exchange traded fund First Trust Dow Jones Global Select Dividend ETF (FGD) provides investors broad exposure to the Broad Developed World 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.A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.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.Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.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 & IndexThe fund is sponsored by First Trust Advisors. It has amassed assets over $565.20 million, making it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Dow Jones Global Select Dividend Index.The Dow Jones Global Select Dividend 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 ExpensesExpense 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.With on par with most peer products in the space, this ETF has annual operating expenses of 0.56%.The fund has a 12-month trailing dividend yield of 5.89%.Sector Exposure and Top HoldingsWhile ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.When you look at individual holdings, Hapag-Lloyd Ag (HLAG.GY) accounts for about 3.42% of the fund's total assets, followed by Caixabank, S.a. (CABK.SM) and Altria Group, Inc. (MO).Its top 10 holdings account for approximately 17.45% of FGD's total assets under management.Performance and RiskThe ETF has gained about 9.98% and was up about 15.82% so far this year and in the past one year (as of 12/12/2024), respectively. FGD has traded between $21.57 and $24.64 during this last 52-week period.The ETF has a beta of 0.92 and standard deviation of 15.66% for the trailing three-year period, making it a low risk choice in the space. With about 110 holdings, it effectively diversifies company-specific risk.AlternativesFirst Trust Dow Jones Global Select Dividend ETF 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) tracks MSCI All Country World Index and the Vanguard Total World Stock ETF (VT) tracks FTSE Global All Cap Index. IShares MSCI ACWI ETF has $19.95 billion in assets, Vanguard Total World Stock ETF has $42.89 billion. ACWI has an expense ratio of 0.32% and VT charges 0.07%.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 LineTo 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Trust Dow Jones Global Select Dividend ETF (FGD): ETF Research Reports Altria Group, Inc. (MO): Free Stock Analysis Report iShares MSCI ACWI ETF (ACWI): ETF Research Reports Vanguard Total World Stock ETF (VT): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks