First Trust SMID Cap Rising Dividend Achievers ETF (SDVY)

ETF First Trust SMID Cap Rising Dividend Achievers ETF Summary:

Profile:

• Focus: Small/Mid-cap US stocks with a history of increasing dividends.
• Asset Allocation: Primarily equities (96.4%), with a small allocation to cash and other (3.6%).
• Investment Strategy: Tracks the Nasdaq US Smart Dividend Achievers Select Index. Invests in companies that have increased dividends for at least ten consecutive years.

Objective:

• To provide investors with long-term capital appreciation and a high level of current income through dividend payments.

Issuer:

• First Trust Advisors L.P.
• Reputation and Reliability: Established in 1990, First Trust is a reputable ETF issuer with a strong track record and over $210 billion in assets under management (as of July 2023).
• Management: Experienced and qualified portfolio management team with expertise in dividend-paying equities.

Market Share:

• Holds the second largest market share (14.5%) in the US Small/Mid Cap Equity Dividend High Income category.

Total Net Assets:

• Approximately $4.45 billion (as of July 18, 2023).

Moat:

• Focus on a specific niche: Invests in a well-defined and growing segment of the market - small/mid-cap companies with consistent dividend growth.
• Experienced management: Portfolio managers have a proven track record in selecting high-quality dividend-paying stocks.
• Lower expense ratio: Compared to similar ETFs in its category.

Financial Performance:

• 3-year annualized return: 13.3% (as of July 18, 2023).
• Outperformed its benchmark: The Russell 2500 Value Index (11.4% 3-year annualized return).
• Dividend yield: 3.49% (as of July 18, 2023).

Growth Trajectory:

• Positive outlook: The small/mid-cap segment and dividend-paying companies are expected to continue growing.
• Historical trends: The ETF has consistently outperformed its benchmark and generated strong returns since inception.

Liquidity:

• Average Daily Trading Volume: 646,000 shares (as of July 18, 2023).
• Bid-Ask Spread: 0.04% (as of July 18, 2023).

Market Dynamics:

• Favorable factors: Low interest rates, healthy corporate earnings, and investor preference for dividend-paying stocks.
• Potential risks: Rising interest rates, economic slowdown, and changes in investor sentiment.

Key Competitors:

• iShares S&P SmallCap 600 Value Index ETF (IJR) - Market Share: 15.3%
• Vanguard Small-Cap Value ETF (VIOV) - Market Share: 14.3%
• SPDR S&P 600 Small Cap Value ETF (SLYV) - Market Share: 13.2%

Expense Ratio:

• 0.58%

Investment Approach and Strategy:

• Strategy: Passively tracks the Nasdaq US Smart Dividend Achievers Select Index.
• Composition: Primarily US small and mid-cap stocks (over 900 holdings), with a focus on sectors like financials, industrials, and healthcare.

Key Points:

• Invests in companies with a history of increasing dividends.
• Offers diversification across a wide range of small and mid-cap stocks.
• Provides a high level of current income through dividend payments.
• Has a strong track record of outperforming its benchmark.
• Offers a lower expense ratio than many similar ETFs.

Risks:

• Market risk: The ETF's value is affected by the overall stock market performance.
• Interest rate risk: Rising interest rates can make dividend-paying stocks less attractive.
• Sector risk: The ETF's performance is tied to the performance of specific sectors, such as financials and industrials.
• Company-specific risk: The performance of individual companies in the portfolio can impact the ETF's value.

Who Should Consider Investing:

• Investors seeking current income and long-term capital appreciation through dividend-paying stocks.
• Investors who prefer a diversified exposure to small and mid-cap companies.
• Investors with a moderate risk tolerance and a long-term investment horizon.

Fundamental Rating Based on AI: 8.5

Justification: The AI-based rating system considers various factors, including the ETF's historical performance, risk profile, management quality, and market dynamics. Based on its strong track record, competitive advantages, and favorable outlook, the ETF receives a high rating.

Resources and Disclaimers:

• Data sources: First Trust website, ETFdb.com, Morningstar.com
• Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult a qualified financial professional before making any investment decisions.

Note: This information is based on data available as of July 2023. Please be aware that the information may change over time. It is recommended to consult the most up-to-date information available from the ETF issuer and other reliable sources before making any investment decisions.