As is the case with rival funds, FVD, which has a trailing 12-month distribution rate of 2.25%, is heavy on utilities and consumer staples names. Those sectors combine for 41.5% of the ETF’s weight and that could leave FVD vulnerable if interest rates rise. FVD is up 16% in the past year assuming dividends were reinvested. [Rising Rates Hurt Some Dividend ETFs]
Lower fee dividend ETF options include the Vanguard Dividend Appreciation ETF (NYSEArca: VIG). The largest U.S. dividend ETF by assets charges just 0.1% per year while the rival Schwab US Dividend Equity ETF (NYSEArca: SCHD) charges just 0.07%. First Trust also offers dividend ETFs with lower fees than FVD, including the new First Trust NASDAQ Rising Dividend Achievers ETF (NasdaqGM: RDVY). RDVY charges 0.5% per year.
First Trust Value Line Dividend Index Fund
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of SCHD.