Launched on January 7, 2014, the First Trust Rising Dividend Achievers ETF (RDVY) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by First Trust Advisors. It has amassed assets over $22.49 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
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 0.47%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.93%.
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 to the Financials sector -- about 31.7% of the portfolio. Information Technology and Industrials round out the top three.
Looking at individual holdings, Lam Research Corporation (LRCX) accounts for about 3.46% of total assets, followed by Applied Materials, Inc. (AMAT) and Kla Corporation (KLAC).
The top 10 holdings account for about 26.29% of total assets under management.
Performance and Risk
RDVY seeks to match the performance of the NASDAQ US Rising Dividend Achievers Index before fees and expenses. The NASDAQ US Rising Dividend Achievers Index is designed to provide access to a diversified portfolio of companies with a history of paying dividends.
The ETF has gained about 9.01% so far this year and it's up approximately 25.66% in the last one year (as of 06/08/2026). In the past 52-week period, it has traded between $60.52 and $76.95.
The ETF has a beta of 1.01 and standard deviation of 16.38% for the trailing three-year period, making it a medium risk choice in the space. With about 74 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Rising Dividend Achievers ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RDVY is a reasonable option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value Index Fund ETF Shares (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $95.07 billion in assets, Vanguard Value Index Fund ETF Shares has $179.25 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.03%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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 Rising Dividend Achievers ETF (RDVY): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).