First Trust Value Line Dividend Index Fund (NYSEArca: FVD) has delivered a 10-year annualized return of 9.2% compared with 7.4% for the S&P 500, according to Morningstar.
The ETF’s market-beating performance hasn’t gone unnoticed by investors as the fund has grown to more than $720 million of assets.
Dividend ETFs have become a popular tool for income-seeking investors in a low interest rate environment.
“While the field has become more crowded over the past few years, FVD has distinguished itself for over a decade as an effective tool for investors seeking below-average volatility with above-average dividends,” said Ryan Issakainen, Senior Vice President and ETF Strategist at First Trust.
“The methodology of the index that FVD tracks is not focused on finding the highest dividend-paying stocks,” First Trust said. “Rather, the index looks for quality companies as determined by Value Line’s® safety rankings that have an above-average dividend yield when compared to the S&P 500 dividend yield.”