Launch of the First Trust Value Line Dividend UCITS ETF
First Trust has launched the safety first, high quality, high dividends and low volatility UCITS ETF.
Based on a long-standing US Strategy that accumulated USD4 billion in-flows in 2019, FVD tracks the Value Line Dividend Index (the “Index”), that has been pricing since November 2006.
The index is designed to seek out quality companies, as determined by Value Line’s propriety safety rankings, that have attractive dividend yields and have exhibited historically low volatility.
By using Value Line’s propriety safety rankings, the Index methodology begins by removing those companies that fail to score a one or two safety ranking, then selects only those companies with a higher dividend yield than that of the S&P 500 Composite index and those that have a market cap of USD1 billion or more. All eligible securities are selected and equally weighted. The Index is rebalanced and reconstituted on a monthly basis thereafter.
Gregg Guerin, Senior Product Specialist for First Trust, says: “We are pleased to be expanding our ETF offering with the launch of a quality and low volatility factor based fund. This latest addition to our equity solutions is a safety first strategy that can provide investment managers with the potential for greater downside protection during periods of market volatility.
“In fact, in the most recent decade, the Index methodology has not only stood firm on the downside but has also outperformed the S&P 500 across all major market corrections.”
The Fund is aimed at wealth managers, discretionary fund managers, advisers and institutional investors, with a total expense ratio of 0.70, and will available in the USD share class on the London Stocks Exchange from 14 February 2020.