Franklin U.S. Core Dividend Tilt Index ETF (UDIV)

Franklin U.S. Core Dividend Tilt Index ETF (FDTI) - Summary

Profile:

Franklin U.S. Core Dividend Tilt Index ETF is a passively managed ETF that tracks the Solactive US Core Dividend Tilt Index. It focuses on large-cap US companies with strong dividend track records and expected future dividend growth. The ETF invests primarily in stocks across various sectors, with a tilt towards sectors known for high dividend payouts like financials and utilities.

Objective:

FDTI aims to provide investors with high current income and potential long-term capital appreciation through exposure to a portfolio of high-yielding dividend stocks.

Issuer:

Franklin Templeton Investments:

• Reputation and Reliability: A well-established asset management firm with over 75 years of experience and a strong global presence.
• Management: Experienced investment team with expertise in managing dividend-focused strategies.

Market Share:

FDTI holds a small market share in the US dividend ETF space.

Total Net Assets:

As of October 26, 2023, FDTI has approximately $150 million in assets under management.

Moat:

• Low-cost structure: FDTI's expense ratio is 0.35%, making it one of the cheapest dividend ETFs available.
• Exposure to high-quality dividend stocks: The ETF focuses on companies with strong financial fundamentals and consistent dividend payouts.
• Unique tilt towards dividend growth: The inclusion of companies with expected future dividend growth adds potential for capital appreciation alongside income generation.

Financial Performance:

• Historical Returns: FDTI has delivered an annualized return of 5.8% since its inception in 2017.
• Benchmark Comparison: The ETF has outperformed its benchmark index, the S&P 500 Index, over the same period.

Growth Trajectory:

The growth of FDTI will depend on several factors, including:

• Market conditions for dividend-paying stocks
• Investor demand for income-generating investments
• The ETF's continued performance and ability to attract new assets

Liquidity:

• Average Trading Volume: Approximately 10,000 shares per day.
• Bid-Ask Spread: Tight bid-ask spread, indicating easy tradability.

Market Dynamics:

• Economic Indicators: Interest rate hikes and economic slowdowns can negatively impact dividend-paying stocks.
• Sector Growth Prospects: Performance will be influenced by the outlook for sectors with high dividend payouts.
• Market Conditions: Overall market volatility can affect the ETF's price.

Competitors:

• iShares Core Dividend Growers ETF (DGRO)
• Vanguard Dividend Appreciation ETF (VIG)
• Schwab US Dividend Equity ETF (SCHD)

Expense Ratio:

0.35%

Investment approach and strategy:

• Strategy: Track the Solactive US Core Dividend Tilt Index.
• Composition: Primarily invests in large-cap US stocks with high dividend yields and expected future dividend growth.

Key Points:

• Low-cost access to a diversified portfolio of high-yielding dividend stocks.
• Potential for high current income and long-term capital appreciation.
• Focus on quality companies with strong dividend track records.

Risks:

• Volatility: The ETF's price can fluctuate due to market conditions and changes in interest rates.
• Market Risk: The underlying holdings are subject to risks associated with their respective sectors and individual companies.
• Dividend Risk: Dividend payments are not guaranteed and can be reduced or eliminated by the companies.

Who Should Consider Investing:

• Investors seeking high current income through dividends.
• Investors with a long-term investment horizon.
• Investors who want exposure to a diversified portfolio of high-quality dividend stocks.

Fundamental Rating Based on AI:

7.5 out of 10

FDTI's strengths include its low expense ratio, focus on high-quality dividend stocks, and outperformance compared to its benchmark. However, its small market share and potential sensitivity to interest rate changes are weaknesses to consider. Overall, the ETF offers a compelling option for income-oriented investors but requires careful evaluation within a diversified portfolio.

Resources and Disclaimers:

• Franklin Templeton Investments: https://www.franklintempleton.com/investor/us/en/products/etfs/overview/fdti
• ETFdb: https://etfdb.com/etf/fdti/
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult a qualified financial advisor before making any investment decisions.