Should First Trust Value Line Dividend ETF (FVD) 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 Value Line Dividend ETF (FVD), a passively managed exchange traded fund launched on 08/19/2003.The fund is sponsored by First Trust Advisors. It has amassed assets over $9.85 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.Why Large Cap ValueLarge cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.CostsCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.Annual operating expenses for this ETF are 0.60%, making it one of the most expensive products in the space.It has a 12-month trailing dividend yield of 2.16%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Industrials sector--about 19.70% of the portfolio. Utilities and Consumer Staples round out the top three.Looking at individual holdings, Rio Tinto Plc (adr) (RIO) accounts for about 0.53% of total assets, followed by Otis Worldwide Corporation (OTIS) and Bristol-Myers Squibb Company (BMY).The top 10 holdings account for about 5.11% of total assets under management.Performance and RiskFVD seeks to match the performance of the Value Line Dividend Index before fees and expenses. 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.The ETF has added roughly 14.76% so far this year and is up about 23.55% in the last one year (as of 11/07/2024). In the past 52-week period, it has traded between $37.34 and $45.91.The ETF has a beta of 0.79 and standard deviation of 13.46% for the trailing three-year period, making it a medium risk choice in the space. With about 208 holdings, it effectively diversifies company-specific risk.AlternativesFirst Trust Value Line Dividend 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, FVD is a reasonable 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 $65.52 billion in assets, Vanguard Value ETF has $131.83 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.Bottom-LineRetail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.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 Value Line Dividend ETF (FVD): ETF Research Reports Bristol Myers Squibb Company (BMY): Free Stock Analysis Report Rio Tinto PLC (RIO): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports Otis Worldwide Corporation (OTIS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks