Should iShares Select Dividend ETF (DVY) Be on Your Investing Radar?

The iShares Select Dividend ETF (DVY) was launched on 11/03/2003, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.The fund is sponsored by Blackrock. It has amassed assets over $20.30 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.Why Large Cap ValueLarge cap companies usually 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.While 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. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.CostsSince 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 0.38%, putting it on par with most peer products in the space.It has a 12-month trailing dividend yield of 3.50%.Sector Exposure and Top HoldingsIt is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Utilities sector--about 29.80% of the portfolio. Financials and Consumer Staples round out the top three.Looking at individual holdings, Altria Group Inc (MO) accounts for about 3.09% of total assets, followed by At&t Inc (T) and Philip Morris International Inc (PM).The top 10 holdings account for about 20.66% of total assets under management.Performance and RiskDVY seeks to match the performance of the Dow Jones U.S. Select Dividend Index before fees and expenses. The Dow Jones U.S. Select Dividend Index measures the performance of a selected group of equity securities issued by companies that have provided relatively high dividend yields on a consistent basis over time.The ETF return is roughly 4.33% so far this year and is up about 21.73% in the last one year (as of 02/25/2025). In the past 52-week period, it has traded between $115.20 and $143.41.The ETF has a beta of 0.88 and standard deviation of 15.45% for the trailing three-year period, making it a medium risk choice in the space. With about 104 holdings, it effectively diversifies company-specific risk.AlternativesIShares Select 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, DVY is a sufficient 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 $69.43 billion in assets, Vanguard Value ETF has $135.37 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 iShares Select Dividend ETF (DVY): ETF Research Reports AT&T Inc. (T): Free Stock Analysis Report Altria Group, Inc. (MO): Free Stock Analysis Report Philip Morris International Inc. (PM): 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