First Trust Value Line Dividend Index Fund (FVD) has delivered a 10-year annualized return of 9.2% compared with 7.4% for the S&P 500, according to Morningstar.
The ETF’s market-beating performance hasn’t gone unnoticed by investors as the fund has grown to more than $720 million of assets.
Dividend ETFs have become a popular tool for income-seeking investors in a low interest rate environment.
“While the field has become more crowded over the past few years, FVD has distinguished itself for over a decade as an effective tool for investors seeking below-average volatility with above-average dividends,” said Ryan Issakainen, Senior Vice President and ETF Strategist at First Trust.
“The methodology of the index that FVD tracks is not focused on finding the highest dividend-paying stocks,” First Trust said. “Rather, the index looks for quality companies as determined by Value Line’s® safety rankings that have an above-average dividend yield when compared to the S&P 500 dividend yield.”
The ETF’s dividend index was designed by investment research firm Value Line. [Dividend ETF Dynamo]
FVD was paying a 30-day SEC yield of 2.68% at the end of August. The fund charges a net expense ratio of 0.70%.
The ETF has managed to outperform the S&P 500 over the past decade with lower volatility. FVD has a 10-year standard deviation of 12.83 versus 14.68 for the S&P 500, according to Morningstar. [ETF Focus: First Trust Value Line Dividend]
First Trust Value Line Dividend Index Fund
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