Safe, Steady and Market-Beating Dividend Fund

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

The final domestic dividend-based exchange-traded fund (ETFs) I want to feature for you in my current series is First Trust Value Line Dividend ETF (FVD).

Roughly 90% of FVD’s total of $2.3 billion assets are invested in common stocks that comprise the Value Line Dividend Index. That index, in turn, is comprised of U.S. companies that pay above-average dividends and have a good outlook for capital appreciation.

FVD has had a return of 15.02% during the past 12 months, handily topping the S&P 500 Index’s rise of -0.22%. So far in July, FVD has gained 3.10% and the month still has another trading day left. FVD’s strong overall uptrend for the year can be seen in the graph below. The fund has a dividend yield of 2.10% and its expense ratio is 0.7%.

fvd-286x300

View the current price, volume, performance and top 10 holdings of SDY at ETFU.com.

FVD holds a total of 192 positions. Each holding only contributes to a fraction of the total portfolio weight, making the overall portfolio very diversified. Its top five holdings are Linear Technology Corp. (LLTC), 0.64%; Garmin Ltd (GRMN), 0.59%; Texas Instruments Inc. (TXN), 0.56%; Caterpillar Inc. (CAT), 0.56%; and Apple Inc. (APPL), 0.55%.

Diversification reduces risk, which is a strong plus in today’s uncertain markets. Plus, 22.64% of the fund is in the utilities sector, which is a defensive sector that limits the fund’s risk from market disruptions.

If you are seeking a diversified and somewhat low-risk fund that’s had strong returns in the past year that have continued unabated, consider looking into First Trust Value Line DVD (FVD).

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As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

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