The First Trust Dow Jones Global Select Dividend ETF (FGD) made its debut on 11/21/2007, and is a smart beta exchange traded fund that provides broad exposure to the Foreign Large Value ETF category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
Because the fund has amassed over $1.28 billion, this makes it one of the average sized ETFs in the Foreign Large Value ETF. FGD is managed by First Trust Advisors. Before fees and expenses, this particular fund 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
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.
Operating expenses on an annual basis are 0.55% for FGD, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.96%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Kohl's Corporation (KSS) accounts for about 2.91% of total assets, followed by Kiwoom Securities Co., Ltd. (039490.KS) and Phoenix Group Holdings Plc (PHNX.LN).
FGD's top 10 holdings account for about 18.16% of its total assets under management.
Performance and Risk
So far this year, FGD has added roughly 13.28%, and is up about 51.73% in the last one year (as of 02/26/2026). During this past 52-week period, the fund has traded between $21.80 and $34.33.
FGD has a beta of 0.67 and standard deviation of 12.97% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 104 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 $18.16 billion in assets, Schwab Fundamental International Equity ETF has $23.19 billion. VYMI has an expense ratio of 0.07% 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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