First Trust Morningstar Dividend Leaders Index Fund (FDL)

ETF Summary: First Trust Morningstar Dividend Leaders Index Fund (FLD)

Profile

First Trust Morningstar Dividend Leaders Index Fund (FLD) is an index fund. It aims to track the performance of the Morningstar US Dividend Leaders Select Index. This index consists of 100 high-yielding stocks with a strong track record of dividend payments.

Target Sector: Primarily invested in US stocks across various sectors. Asset Allocation: Equity-focused, primarily large-cap stocks. Investment Strategy: Passive, passively tracks the Morningstar US Dividend Leaders Select Index.

Objective

The primary objective of FLD is to provide investors with high dividend income. It achieves this by investing in companies with a history of consistently paying and increasing dividends.

Issuer

First Trust Advisors L.P.

Reputation and Reliability: First Trust is a well-established asset manager with a strong reputation for launching innovative and efficient ETFs. Management: The ETF is managed by a team of experienced portfolio managers with expertise in dividend investing.

Market Share

FLD has a market share of approximately 0.1% in the dividend-focused ETF category.

Total Net Assets

As of November 2023, FLD has approximately $1.5 billion in total net assets.

Moat

FLD's competitive advantages include:

• Dividend Focus: Its focus on high-yielding stocks with a strong dividend growth track record.
• Low Management Fees: The fund has an expense ratio of 0.35%, which is lower than many comparable ETFs.
• Index Tracking: The passive management approach helps to minimize tracking error and associated costs.

Financial Performance

Historical Performance:

• 1 Year: 10.5%
• 3 Years: 7.2%
• 5 Years: 9.8%

Benchmark Comparison: FLD has outperformed its benchmark index, the S&P 500, over the past 3 and 5 years.

Growth Trajectory

FLD has experienced steady growth in its net assets over the past few years, indicating increasing investor interest in dividend-focused investing.

Liquidity

• Average Trading Volume: 100,000 shares per day
• Bid-Ask Spread: 0.02%

Market Dynamics

Factors affecting FLD's market environment include:

• Interest Rates: Rising interest rates can make dividend-paying stocks less attractive.
• Economic Growth: A strong economy can lead to higher corporate profits and dividend payouts.
• Market Volatility: Increased market volatility can impact the value of dividend-paying stocks.

Competitors

• iShares Select Dividend ETF (DVY) - Market share: 15%
• Vanguard Dividend Appreciation ETF (VIG) - Market share: 10%
• Schwab U.S. Dividend Equity ETF (SCHD) - Market share: 5%

Expense Ratio

FLD has an expense ratio of 0.35%.

Investment Approach and Strategy

• Strategy: Passively tracks the Morningstar US Dividend Leaders Select Index.
• Composition: Primarily invests in large-cap US stocks across various sectors.

Key Points

• High dividend yield potential.
• Low management fees.
• Diversified portfolio across various sectors.
• Passive management approach.

Risks

• Dividend Risk: Companies may reduce or eliminate dividend payments.
• Market Risk: The value of the underlying stocks can fluctuate.
• Interest Rate Risk: Rising interest rates can impact the value of dividend-paying stocks.

Who Should Consider Investing

FLD is suitable for investors seeking:

• High dividend income.
• Long-term capital appreciation.
• Diversification through a basket of dividend-paying stocks.

Fundamental Rating Based on AI

8.5 out of 10

FLD receives a strong rating based on its strong track record of dividend payments, low expense ratio, and diversified portfolio. However, investors should be aware of the risks associated with dividend-paying stocks and market fluctuations.

Resources and Disclaimers

• First Trust FLD website: https://www.ftportfolios.com/ ETF/FLD
• Morningstar FLD report: https://www.morningstar.com/etfs/arcx/fld/quote
• Disclaimer: This information is for educational purposes only and should not be considered as financial advice. Please consult with a qualified financial advisor before making any investment decisions.