Launched on 11/21/2007, the First Trust Dow Jones Global Select Dividend ETF (FGD) is a smart beta exchange traded fund offering broad exposure to the Foreign Large Value ETF category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $862.53 million, making it one of the average sized ETFs in the Foreign Large Value ETF. Before fees and expenses, FGD seeks to match the performance of the Dow Jones Global Select Dividend Index.
The Dow Jones Global Select Dividend Index is an indicated annual dividend yield weighted index of 100 stocks selected from the developed-market portion of the Dow Jones World Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.56% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 4.64%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
When you look at individual holdings, Spark New Zealand Limited (SPK.NZ) accounts for about 1.97% of the fund's total assets, followed by Enagas S.a. (ENG.SM) and Phoenix Group Holdings Plc (PHNX.LN).
The top 10 holdings account for about 16.52% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Dow Jones Global Select Dividend ETF has added roughly 32.41% so far, and it's up approximately 27.32% over the last 12 months (as of 08/21/2025). FGD has traded between $21.80 $29.06 in this past 52-week period.
The ETF has a beta of 0.76 and standard deviation of 14.83% for the trailing three-year period, making it a low risk choice in the space. With about 105 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Dow Jones Global Select Dividend ETF is a reasonable option for investors seeking to outperform the Foreign Large Value ETF segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard International High Dividend Yield ETF (VYMI) tracks FTSE All-World ex US High Dividend Yield Index and the Schwab Fundamental International Equity ETF (FNDF) tracks Russell RAFI Developed ex US Large Co. Index (Net). Vanguard International High Dividend Yield ETF has $11.88 billion in assets, Schwab Fundamental International Equity ETF has $17.35 billion. VYMI has an expense ratio of 0.17% and FNDF changes 0.25%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Foreign Large Value ETF
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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First Trust Dow Jones Global Select Dividend ETF (FGD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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