The iShares Select Dividend ETF (DVY) was launched on 11/03/2003, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value 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.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $22.44 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the Dow Jones U.S. Select Dividend Index.
The Dow Jones U.S. Select Dividend Index measures the performance of a selected group of equity securities issued by companies that have provided relatively high dividend yields on a consistent basis over time.
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 0.38% for DVY, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.35%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
DVY's heaviest allocation is in the Utilities sector, which is about 26.7% of the portfolio. Its Financials and Consumer Staples round out the top three.
When you look at individual holdings, Seagate Technology Holdings Plc (STX) accounts for about 3.69% of the fund's total assets, followed by Ford Motor Co (F) and Altria Group Inc (MO).
DVY's top 10 holdings account for about 21.52% of its total assets under management.
Performance and Risk
So far this year, DVY has added roughly 8.71%, and was up about 18.49% in the last one year (as of 03/06/2026). During this past 52-week period, the fund has traded between $118.37 and $157.93.
DVY has a beta of 0.73 and standard deviation of 14.20% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 105 holdings, it effectively diversifies company-specific risk .
Alternatives
iShares Select 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 Index Fund ETF Shares (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $84.48 billion in assets, Vanguard Value Index Fund ETF Shares has $169.26 billion. SCHD has an expense ratio of 0.06% and VTV changes 0.03%.
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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iShares Select Dividend ETF (DVY): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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