A smart beta exchange traded fund, the ProShares S&P Technology Dividend Aristocrats ETF (TDV) debuted on 11/05/2019, and offers broad exposure to the Technology ETFs 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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 Proshares, and has been able to amass over $276.38 million, which makes it one of the average sized ETFs in the Technology ETFs. This particular fund seeks to match the performance of the S&P TECHNOLOGY DIVIDEND ARISTOCRATS INDX before fees and expenses.
The S&P Technology Dividend Aristocrats Index targets companies from information technology, internet and direct marketing retail, interactive home entertainment, and interactive media and services segments of the economy.
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.
Operating expenses on an annual basis are 0.45% for TDV, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.04%.
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 in the Information Technology sector - about 85.1% of the portfolio. Financials and Industrials round out the top three.
Taking into account individual holdings, Avnet Inc (AVT) accounts for about 3.27% of the fund's total assets, followed by Cognex Corp (CGNX) and Power Integrations Inc (POWI).
The top 10 holdings account for about 27.25% of total assets under management.
Performance and Risk
The ETF has added roughly 17.19% and it's up approximately 20.07% so far this year and in the past one year (as of 07/13/2026), respectively. TDV has traded between $81.52 and $106.70 during this last 52-week period.
TDV has a beta of 1.11 and standard deviation of 19.62% for the trailing three-year period. With about 40 holdings, it has more concentrated exposure than peers .
Alternatives
ProShares S&P Technology Dividend Aristocrats ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
iShares Core Dividend Growth ETF (DGRO) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) tracks NASDAQ US Dividend Achievers Select Index. iShares Core Dividend Growth ETF has $42.04 billion in assets, Vanguard Dividend Appreciation Index Fund ETF Shares has $111.23 billion. DGRO has an expense ratio of 0.08% and VIG changes 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs
Bottom Line
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ProShares S&P Technology Dividend Aristocrats ETF (TDV): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).