Should First Trust Value Line Dividend ETF (FVD) Be on Your Investing Radar?

Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the First Trust Value Line Dividend ETF (FVD) is a passively managed exchange traded fund launched on August 19, 2003.The fund is sponsored by First Trust Advisors. It has amassed assets over $8.53 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.Why Large Cap ValueCompanies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets. CostsSince 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 0.61%, making it one of the most expensive products in the space.It has a 12-month trailing dividend yield of 2.29%.Sector Exposure and Top HoldingsEven 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 Utilities sector -- about 20.4% of the portfolio. Industrials and Financials round out the top three.Looking at individual holdings, Nextera Energy, Inc. (NEE) accounts for about 0.49% of total assets, followed by Caterpillar Inc. (CAT) and Xcel Energy Inc. (XEL).The top 10 holdings account for about 4.63% of total assets under management.Performance and RiskFVD 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.The ETF has added about 6.18% so far this year and it's up approximately 2.43% in the last one year (as of 11/19/2025). In the past 52-week period, it has traded between $40.62 and $46.86.The ETF has a beta of 0.73 and standard deviation of 11.6% for the trailing three-year period, making it a medium risk choice in the space. With about 242 holdings, it effectively diversifies company-specific risk.AlternativesFirst Trust Value Line Dividend 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, FVD is a sufficient 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 ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $70.03 billion in assets, Vanguard Value ETF has $149.28 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.Bottom-LineWhile an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Trust Value Line Dividend ETF (FVD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks