First Trust US Equity Dividend Select ETF (RNDV)

Overview

The First Trust US Equity Dividend Select ETF (FVD) seeks investment results that correspond generally to the price and yield of an equity index called the NASDAQ Select US Dividend Achievers Index. It focuses on dividend-paying US companies with a history of dividend increases, employing a selection methodology based on dividend yield, dividend payout ratio, and volatility.

Reputation and Reliability

First Trust is a well-established ETF issuer known for its diverse range of thematic and strategic ETFs. They have a solid track record in the ETF market.

Management Expertise

First Trust has a team of experienced investment professionals managing its ETFs, leveraging quantitative and fundamental analysis in their investment strategies.

Goal

The ETF seeks to provide current income and long-term capital appreciation by investing in a portfolio of US companies that have a history of dividend increases.

Investment Approach and Strategy

Strategy: The ETF aims to track the NASDAQ Select US Dividend Achievers Index. The index selects companies based on dividend yield, dividend payout ratio, and historical volatility.

Composition The ETF primarily holds dividend-paying US stocks across various sectors.

Market Share: Relatively small compared to larger dividend ETFs.

Total Net Assets (AUM): 1250000000

Key Competitors

• Schwab US Dividend Equity ETF (SCHD)
• Vanguard Dividend Appreciation ETF (VIG)
• iShares Select Dividend ETF (DVY)

Competitive Landscape

The dividend ETF market is highly competitive. FVD differentiates itself with its specific index methodology, which includes factors beyond just dividend yield and growth. Competitors like SCHD and VIG have lower expense ratios and larger AUM, offering greater liquidity and potentially lower tracking error. FVD's advantage lies in its unique selection criteria that may lead to different performance characteristics.

Historical Performance: Historical performance varies depending on market conditions. Specific data is available from financial websites for different time periods.

Benchmark Comparison: Performance should be compared to the NASDAQ Select US Dividend Achievers Index to evaluate tracking effectiveness.

Expense Ratio: 0.06

Average Trading Volume

The ETF's average trading volume suggests moderate liquidity, suitable for most individual investors.

Bid-Ask Spread

The bid-ask spread is typically small, indicating relatively low trading costs.

Market Environment Factors

Economic growth, interest rates, and dividend policies of underlying companies influence the ETF's performance.

Growth Trajectory

Growth is tied to the performance of dividend-paying companies and investor demand for dividend-focused strategies. There may be periodic adjustments to the holdings based on the index methodology.

Competitive Edge

FVD's competitive edge lies in its unique dividend selection methodology, which emphasizes dividend yield, payout ratio, and volatility, potentially leading to a different risk-return profile compared to broader dividend ETFs. The fund's specific selection criteria can identify companies that offer a balance of dividend income and financial stability. This focus on a specific investment approach can be attractive to investors seeking a targeted dividend strategy. It may provide a diversified portfolio of dividend-paying stocks selected with a comprehensive set of parameters. However, AUM may be a disadvantage for FVD as its expense ratio is higher than the other dividend ETF.

Volatility

Volatility is generally moderate, reflecting the stable nature of dividend-paying stocks.

Market Risk

The ETF is exposed to market risk, sector concentration risk (depending on the sector allocation of the index), and dividend risk (companies may reduce or eliminate dividends).

Ideal Investor Profile

The ideal investor is one seeking current income and long-term capital appreciation with a focus on dividend-paying stocks. This ETF may suit investors interested in a diversified approach towards dividends.

Market Risk

Suitable for long-term investors seeking dividend income and moderate capital appreciation.

First Trust US Equity Dividend Select ETF is a dividend-focused ETF designed to track the NASDAQ Select US Dividend Achievers Index. It targets dividend-paying US companies with a history of dividend increases, chosen based on yield, payout ratio, and volatility. While it provides a unique selection methodology compared to its competitors, investors should consider its expense ratio and AUM. It is best suited for long-term investors seeking a balance between dividend income and potential capital appreciation from US equities.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

Data is for informational purposes only and should not be considered financial advice. Past performance is not indicative of future results. Market conditions can change rapidly.