Making its debut on 08/19/2003, smart beta exchange traded fund First Trust Value Line Dividend ETF (FVD) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $8.47 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the Value Line Dividend Index.
The Value Line Dividend Index is a modified equal dollar weighted index comprised of U.S. exchange listed securities of companies that pay above-average dividends and have potential for capital appreciation.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for FVD are 0.61%, which makes it one of the most expensive products in the space.
FVD's 12-month trailing dividend yield is 2.27%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector - about 19.6% of the portfolio. Industrials and Financials round out the top three.
Taking into account individual holdings, Nextera Energy, Inc. (NEE) accounts for about 0.49% of the fund's total assets, followed by Caterpillar Inc. (CAT) and Xcel Energy Inc. (XEL).
The top 10 holdings account for about 4.63% of total assets under management.
Performance and Risk
The ETF return is roughly 7.19% and is up roughly 2.99% so far this year and in the past one year (as of 12/11/2025), respectively. FVD has traded between $40.62 and $46.86 during this last 52-week period.
FVD has a beta of 0.71 and standard deviation of 11.53% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 242 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Value Line Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $71.26 billion in assets, Vanguard Value ETF has $156.62 billion. SCHD has an expense ratio of 0.06% and VTV changes 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value
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 Value Line Dividend ETF (FVD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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