First Trust Value Line Dividend ETF Plays It Safe
A Seeking Alpha Contribution
Summary
- FVD uses Value Line’s Safety Rank as a selection criteria.
- Dividend ETFs tend to be less volatile than the overall market; FVD is less volatile still.
- FVD is one of the largest dividends ETFs, but expensive relative to its peers with a 0.70 percent expense ratio.
First Trust Value Line Dividend ETF (NYSEARCA:FVD) is the oldest dividend ETF in existence, created in August 2003. The fund has found favor with investors; it has nearly $1 billion in assets. Still, in a market that often sees first movers come to dominate their market niche, FVD has been passed in assets by newer offerings from iShares, Vanguard and Schwab.
Index & Strategy
FVD is using Value Line Safety Rankings in order to narrow the field of potential holdings. It starts with U.S. listed companies that have a #1 or #2 ranking according to Value Line. The Safety Rank “is derived from a stock’s Price Stability index and the Financial Strength rating of a company…high Safety ranks are often associated with large, financially sound companies; these same companies also often have somewhat less-than-average growth prospects because their primary markets tend to be growing slowly or not at all.” To Continue Reading Please Click Here.
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