Is First Trust Value Line Dividend ETF (FVD) a Strong ETF Right Now?

The First Trust Value Line Dividend ETF (FVD) was launched on 08/19/2003, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large 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.Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.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.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.Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.Fund Sponsor & IndexManaged by First Trust Advisors, FVD has amassed assets over $9.40 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. FVD, before fees and expenses, seeks to match the performance of the Value Line Dividend Index.The Value Line Dividend Index is a modified equal dollar weighted index comprised of U.S. exchange listed securities of companies that pay above-average dividends and have potential for capital appreciation.Cost & Other ExpensesInvestors 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 0.60% for FVD, making it one of the most expensive products in the space.It's 12-month trailing dividend yield comes in at 2.19%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.FVD's heaviest allocation is in the Industrials sector, which is about 21% of the portfolio. Its Utilities and Consumer Staples round out the top three.Taking into account individual holdings, Toyota Motor Corporation (TM) accounts for about 0.49% of the fund's total assets, followed by Honda Motor Co., Ltd. (adr) (HMC) and Starbucks Corporation (SBUX).FVD's top 10 holdings account for about 4.66% of its total assets under management.Performance and RiskSo far this year, FVD has added roughly 1.81%, and is up about 13.50% in the last one year (as of 01/27/2025). During this past 52-week period, the fund has traded between $39.94 and $46.70.The fund has a beta of 0.80 and standard deviation of 13.37% for the trailing three-year period, which makes FVD a medium risk choice in this particular space. With about 223 holdings, it effectively diversifies company-specific risk.AlternativesFirst Trust Value Line Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $67.99 billion in assets, Vanguard Value ETF has $134.39 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.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 - Large Cap Value.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 Value Line Dividend ETF (FVD): ETF Research Reports Toyota Motor Corporation (TM): Free Stock Analysis Report Starbucks Corporation (SBUX): Free Stock Analysis Report Honda Motor Co., Ltd. (HMC): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): 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