Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the First Trust Value Line Dividend ETF (FVD) is a smart beta exchange traded fund launched on 08/19/2003.
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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of 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 First Trust Advisors. FVD has been able to amass assets over $8.12 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the Value Line Dividend Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
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 2.28%.
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.
For FVD, it has heaviest allocation in the Financials sector --about 20.6% of the portfolio --while Utilities and Industrials round out the top three.
Looking at individual holdings, Thomson Reuters Corporation (TRI) accounts for about 0.6% of total assets, followed by Verisign, Inc. (VRSN) and International Business Machines Corporation (IBM).
The top 10 holdings account for about 4.91% of total assets under management.
Performance and Risk
The ETF has added roughly 3.66% so far this year and is up roughly 12.48% in the last one year (as of 04/23/2026). In the past 52-week period, it has traded between $43.31 and $50.08
FVD has a beta of 0.70 and standard deviation of 11.10% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 235 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 Index Fund ETF Shares (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $87.42 billion in assets, Vanguard Value Index Fund ETF Shares has $169.04 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
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First Trust Value Line Dividend ETF (FVD): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).