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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Blackrock, DVY has amassed assets over $23.22 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. Before fees and expenses, DVY 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
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.
Operating expenses on an annual basis are 0.38% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 3.33%.
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 Financials sector, which is about 25.9% of the portfolio. Its Utilities and Consumer Staples round out the top three.
When you look at individual holdings, Pfizer Inc (PFE) accounts for about 2.3% of the fund's total assets, followed by Altria Group Inc (MO) and Verizon Communications Inc (VZ).
Its top 10 holdings account for approximately 18.23% of DVY's total assets under management.
Performance and Risk
So far this year, DVY has gained about 13.72%, and was up about 20.08% in the last one year (as of 07/10/2026). During this past 52-week period, the fund has traded between $133.88 and $159.81.
The ETF has a beta of 0.66 and standard deviation of 13.53% for the trailing three-year period, making it a medium risk choice in the space. With about 106 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 $97.73 billion in assets, Vanguard Value Index Fund ETF Shares has $186.57 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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iShares Select Dividend ETF (DVY): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).