The First Trust Dow Jones Global Select Dividend ETF (FGD) was launched on 11/21/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Foreign Large Value ETF category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors, and has been able to amass over $763.81 million, which makes it one of the average sized ETFs in the Foreign Large Value ETF. This particular fund, before fees and expenses, 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 5.12%.
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.
Taking into account individual holdings, Enagas S.a. (ENG.SM) accounts for about 1.95% of the fund's total assets, followed by Phoenix Group Holdings Plc (PHNX.LN) and Spark New Zealand Limited (SPK.NZ).
FGD's top 10 holdings account for about 15.12% of its total assets under management.
Performance and Risk
The ETF has gained about 23.99% so far this year and was up about 28.85% in the last one year (as of 06/17/2025). In the past 52-week period, it has traded between $21.80 and $27.47.
The fund has a beta of 0.74 and standard deviation of 15.21% for the trailing three-year period, which makes FGD a low risk choice in this particular space. With about 110 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 $10.57 billion in assets, Schwab Fundamental International Equity ETF has $16.21 billion. VYMI has an expense ratio of 0.17% and FNDF charges 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 Reports Vanguard International High Dividend Yield ETF (VYMI): ETF Research Reports Schwab Fundamental International Equity ETF (FNDF): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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