Should First Trust Rising Dividend Achievers ETF (RDVY) Be on Your Investing Radar?

Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the First Trust Rising Dividend Achievers ETF (RDVY), a passively managed exchange traded fund launched on 01/07/2014.The fund is sponsored by First Trust Advisors. It has amassed assets over $12.85 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.Why Large Cap ValueCompanies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.CostsExpense 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 0.49%, putting it on par with most peer products in the space.It has a 12-month trailing dividend yield of 1.65%.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.This ETF has heaviest allocation to the Financials sector--about 42% of the portfolio. Information Technology and Energy round out the top three.Looking at individual holdings, East West Bancorp, Inc. (EWBC) accounts for about 2.34% of total assets, followed by Snap-On Incorporated (SNA) and Garmin Ltd. (GRMN).The top 10 holdings account for about 22.15% of total assets under management.Performance and RiskRDVY seeks to match the performance of the NASDAQ US Rising Dividend Achievers Index before fees and expenses. The NASDAQ US Rising Dividend Achievers Index is designed to provide access to a diversified portfolio of companies with a history of paying dividends.The ETF return is roughly 20.76% so far this year and it's up approximately 32.58% in the last one year (as of 11/20/2024). In the past 52-week period, it has traded between $47.16 and $63.50.The ETF has a beta of 1.10 and standard deviation of 19.97% for the trailing three-year period, making it a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.AlternativesFirst Trust Rising Dividend Achievers ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RDVY is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $65.06 billion in assets, Vanguard Value ETF has $130.21 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.Bottom-LineWhile 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.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 Rising Dividend Achievers ETF (RDVY): ETF Research Reports Garmin Ltd. (GRMN): Free Stock Analysis Report Snap-On Incorporated (SNA): Free Stock Analysis Report East West Bancorp, Inc. (EWBC): 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