The First Trust SMID Cap Rising Dividend Achievers ETF offers a unique investment opportunity in mid-cap value stocks with a solid dividend history
Mid-cap companies, which have market caps between $2 billion and $10 billion, can offer a sweet spot for investors. They tend to have a mix of stability and growth potential that smaller or larger companies might not provide. Value stocks, like those in this ETF, usually have lower price-to-earnings ratios, but they might not grow as fast as growth stocks, especially in booming markets.
When considering an ETF, it’s crucial to look at the expense ratio. SDVY has an annual operating cost of 0.60%, which is on the higher side for ETFs. It also offers a 12-month trailing dividend yield of 1.54%, which is decent for income-focused investors.
This ETF has a significant chunk of its investments in the Financials sector, making up about 32.80% of its portfolio. The top three sectors also include Industrials and Consumer Discretionary. Notable holdings include Select Water Solutions and SM Energy Company, with the top ten holdings representing about 10.89% of total assets.
In terms of performance, SDVY aims to track the NASDAQ US Small Mid Cap Rising Dividend Achievers Index. So far this year, it’s up about 4.07% and has seen a 19.17% increase over the past year. It has a beta of 1.19, indicating it’s a bit more volatile than the market, but it diversifies risk well with around 96 holdings.
If you’re looking for alternatives, the iShares Russell Mid-Cap Value ETF and the Vanguard Mid-Cap Value ETF are worth checking out. They have lower expense ratios and larger asset bases, which might appeal to some investors.
Overall, SDVY is a solid choice for long-term investors who appreciate the benefits of passively managed ETFs, like low costs and transparency. If you want to dive deeper into ETFs, consider exploring more options that align with your investment goals.
