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

The First Trust Value Line Dividend ETF (FVD) made its debut on 08/19/2003, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value 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.Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.Fund Sponsor & IndexFVD is managed by First Trust Advisors, and this fund has amassed over $9.09 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, FVD 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 ExpensesSince 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 this ETF are 0.60%, making it one of the most expensive products in the space.FVD's 12-month trailing dividend yield is 2.36%.Sector Exposure and Top HoldingsETFs offer 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 in the Industrials sector - about 20.60% of the portfolio. Utilities and Consumer Staples round out the top three.Looking at individual holdings, Hsbc Holdings Plc (adr) (HSBC) accounts for about 0.50% of total assets, followed by Brown-Forman Corporation (BF/B) and Sanofi (adr) (SNY).The top 10 holdings account for about 4.83% of total assets under management.Performance and RiskThe ETF has added about 1.88% so far this year and it's up approximately 7.14% in the last one year (as of 03/31/2025). In the past 52-week period, it has traded between $39.94 and $46.70.The ETF has a beta of 0.78 and standard deviation of 13.16% for the trailing three-year period, making it a medium risk choice in the space. With about 225 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 $69.68 billion in assets, Vanguard Value ETF has $131.84 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 Sanofi (SNY): Free Stock Analysis Report HSBC Holdings plc (HSBC): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks