First Trust US Equity Dividend Select ETF (RNDV)

ETF First Trust US Equity Dividend Select ETF (FNK) Summary:

Profile:

• Focus: US Equity, Dividend-paying stocks
• Asset Allocation: Primarily large-cap stocks, with some mid-cap exposure
• Strategy: Actively managed, seeking high dividend yield and capital appreciation

Objective:

• Investment Goal: Generate high current income and long-term capital growth through dividend-paying stocks.

Issuer:

• First Trust Advisors L.P. (FT):
  • Reputation: Established investment manager with over $225 billion in assets under management.
  • Reliability: Strong track record, consistently ranked among the top ETF issuers.
  • Management: Experienced team with expertise in equity investing and portfolio management.

Market Share:

• Holds roughly 1% of the total assets invested in dividend-focused ETFs.

Total Net Assets:

• $5.61 billion (as of November 10, 2023).

Moat:

• Active management approach allows for flexibility in selecting stocks and managing risk.
• Strong track record of outperforming the benchmark index.
• Focus on high-quality dividend-paying companies with sustainable dividend payouts.

Financial Performance:

• 3-year average annual return: 12.45%
• 5-year average annual return: 14.87%
• Since inception (2006): 10.15% annualized return

Growth Trajectory:

• Consistent growth in AUM over the past years, indicating investor confidence.
• Dividend-paying stocks have historically outperformed the broader market over long periods.

Liquidity:

• Average daily trading volume: Over 1 million shares
• Bid-ask spread: Tight, indicating ease of buying and selling shares.

Market Dynamics:

• Rising interest rates may impact dividend-paying stocks in the short term.
• Continued economic growth could lead to increased demand for dividend-paying stocks.

Competitors:

• Vanguard High Dividend Yield ETF (VYM)
• iShares Select Dividend ETF (DVY)
• SPDR S&P Dividend ETF (SDY)

Expense Ratio:

• 0.50%

Investment approach and strategy:

• Strategy: Actively managed, based on a quantitative model that selects stocks with high dividend yields and strong fundamentals.
• Composition: Primarily large-cap stocks from various sectors, with a focus on financials, energy, and utilities.

Key Points:

• High dividend yield and potential for capital appreciation.
• Actively managed for flexibility and performance.
• Focus on quality companies with sustainable dividend payouts.

Risks:

• Market volatility can impact the price of the ETF.
• Dividend payments may be reduced or suspended if the companies' earnings decline.
• Interest rate hikes can negatively impact dividend-paying stocks.

Who Should Consider Investing:

• Investors seeking current income and long-term capital growth.
• Investors with a long-term investment horizon.
• Investors comfortable with the volatility associated with equities.

Fundamental Rating Based on AI:

8.5/10

FNK is a well-managed ETF with a strong track record and a focus on high-quality dividend-paying companies. It has a moderate expense ratio and good liquidity. However, investors should be aware of the risks associated with dividend-paying stocks, such as market volatility and potential dividend cuts.

Resources and Disclaimers:

• Data used for this analysis is from First Trust website, ETF.com, and Morningstar as of November 10, 2023.
• This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.