Problematic for FDL has been its 14.4% weight to the energy sector, which has recently been savagely repudiated. The ETF’s exposure to that group includes a combined 12% weight to Dow component Chevron (NYSE: CVX) and ConocoPhillips (NYSE: COP).
However, FDL features a modestly higher weight to the consumer staples sector, which along with the aforementioned utilities and telecom weights helps reduce the ETF’s volatility and correlation to the broader market.
FDL’s three-year standard deviation is nearly 200 basis points below the S&P 500 with a beta of 0.47 and a correlation of just 0.58 to the benchmark U.S. index, according to First Trust data.
First Trust Morningstar Dividend Leaders Index Fund
