FVD: An Excellent Sector Mix

seekingalpha07-20

Dividend investing may make a comeback due to volatility and interest in dividend-paying stocks.First Trust Value Line® Dividend Index Fund ETF tracks the Value Line Dividend Index, focusing on above-...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2452281970?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1445810122/image_1445810122.jpg","is_english":true,"pubTime":"2024-07-20 05:22","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2452281970","market":"fut","top_or_hot":-1,"title":"FVD: An Excellent Sector Mix","media":"seekingalpha","content":"<div>\n<p>Dividend investing may make a comeback due to volatility and interest in dividend-paying stocks.First Trust Value Line® Dividend Index Fund ETF tracks the Value Line Dividend Index, focusing on above-...</p>\n\n<a href=\"https://seekingalpha.com/article/4705205-fvd-an-excellent-sector-mix\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>FVD: An Excellent Sector Mix</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nFVD: An Excellent Sector Mix\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-20 05:22 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4705205-fvd-an-excellent-sector-mix><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Dividend investing may make a comeback due to volatility and interest in dividend-paying stocks.First Trust Value Line® Dividend Index Fund ETF tracks the Value Line Dividend Index, focusing on above-...</p>\n\n<a href=\"https://seekingalpha.com/article/4705205-fvd-an-excellent-sector-mix\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FVD","symbol_name":"第一信托超值系列红利指数基金","start_time":0,"source_url":"https://seekingalpha.com/article/4705205-fvd-an-excellent-sector-mix","article_id":"2452281970","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1445810122/image_1445810122.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2452281970","pubTimestamp":1721424170,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Dividend investing may make a comeback due to volatility and interest in dividend-paying stocks.First Trust Value Line Dividend Index Fund ETF tracks the Value Line Dividend Index, focusing on above-a","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FVD":"第一信托超值系列红利指数基金","BK4585":"ETF&股票定投概念","VIG":"股利增长指数ETF-Vanguard","BK4588":"碎股","BK4550":"红杉资本持仓","FDN":"First Trust Dow Jones Internet I"},"translate_title":"FVD：出色的行业组合","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"FVD":1,"VIG":1,"FDN":0.9},"content_text":"Dividend investing may make a comeback due to volatility and interest in dividend-paying stocks.First Trust Value Line® Dividend Index Fund ETF tracks the Value Line Dividend Index, focusing on above-average dividend yield stocks.The FVD ETF offers diversification, equal-weighted holdings, and conservative sector positions, potentially outperforming in volatile markets.   PM Images I believe dividend investing will make a big comeback as volatility persists in large-cap averages entering the election and an interest rate cutting cycle. The pendulum tends to swing from capital appreciation as the primary driver of total return to yield, and I think we’re at a juncture where interest is just starting to return for dividend-paying stocks. If you’re in agreement, you may want to consider the First Trust Value Line® Dividend Index Fund ETF (NYSEARCA:FVD). This fund aims to track the performance of the Value Line® Dividend Index, a rules-based index of stocks with above-average dividend yields relative to the S&P 500. To screen for potential positions, the Value Line Dividend Index starts with a universe of stocks with a Value Line Safety Ranking of #1 or #2, screening out stocks with relatively high-risk profiles. Within that universe, Value Line screens for firms with a dividend yield greater than the indicated dividend yield of the S&P 500. Lastly, Value Line excludes firms with an equity market cap under $1 billion, a move that filters out less liquid/stable stocks. Once screened, the Value Line® Dividend Index attempts to keep an equally weighted representation across all holdings, rebalancing the underlying holdings on a monthly basis to maintain this balance. By doing so, the index attempts to provide investors with a diversified pool of dividend-paying companies that are less affected by concentration issues. A Look At The Holdings The fund currently has 203 holdings, with no position making up more than 0.59% of the fund. The equal weighting is evident here, which is something I’m a huge fan of given the risks I’ve highlighted around market-cap weighting portfolios in today’s environment. This diversification reduces specific-company risks and still provides broad exposure to the investment theme around dividend-centered companies.   ftportfolios.com These major holdings reflect the fund’s emphasis on attractively valued, cash-generating businesses that have a record of rewarding shareholders with increasing payments. Sector Composition and Weightings From a sector perspective, the top 3 sectors are all favorites of mine. Industrials have been a standout winner in this cycle in general (and tend to have solid dividends generally). I love seeing Utilities ranked second, as I’m quite positive on the sector. Note that the Consumer Staples allocation also is a big plus here and, combined with Utilities, results in a conservative sector position which should lower volatility in economic slowdowns where those sectors are relatively less impacted.   ftportfolios.com Peer Comparison There are plenty of dividend-focused funds out there that compete with FVD. One fund worth comping against is the Vanguard Dividend Appreciation ETF (VIG), which has more holdings (339) and a broad focus on dividend stocks as well. When we look at the price ratio of FVD to VIG, we find that VIG has broadly underperformed (but turning up recently). Why? Because VIG’s largest allocation is to Tech at 24%, and that’s been the standout sector. This will change eventually, of course, which is why I’d personally prefer something like FVD here given its sector mix at this point in the cycle.   stockcharts.com Pros and Cons On the positive side? The companies themselves. Those entities which pay dividends tend to be financially strong, disciplined in allocating capital, and more resilient during downturns in the market. While the idea that higher-than-average-yielding companies do better in down markets may be counterintuitive, there’s substantial research supporting this concept. FVD addresses concentration risk and enhances diversification through its equal-weighting ETF — a must in my view. And while the yield at 2.23% isn’t huge, it’s been stable and consistent over time.   ycharts.com The downside? Dividend-paying companies can have difficulties maintaining or growing their dividend payouts in a general economic downturn or if a company encounters sector-specific headwinds. Additionally, sectors that are traditionally high yielding, such as Utilities and Consumer Staples, can underperform during periods of strong economic growth and market rallies. Conclusion  The First Trust Value Line® Dividend Index Fund is a good fund overall. I love the sector mix, and think the time may be right for something like this as volatility broadly likely increases. The lowered Tech exposure, and focus on quality, makes this appealing for more conservative equity investors, and I think it can outperform in the year ahead.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2452281970"}