An index-based ETF that provides exposure to
small and mid-cap companies with a history of raising their
dividends and the potential for continued dividend growth
First Trust Advisors L.P. (“First Trust”), a leading
exchange-traded fund (“ETF”) provider and asset manager, announced
today that it has launched a new index-based ETF, the First Trust
SMID Cap Rising Dividend Achievers ETF (Nasdaq: SDVY) (the
“fund”). The fund seeks investment results that correspond
generally to the price and yield, before fees and expenses, of an
equity index called the Nasdaq US Small Mid Cap Rising Dividend
Achievers™ Index (the “Index”). The Index is designed to provide
access to a diversified portfolio of small- and mid-cap income
producing securities. The Index construction process looks beyond
just yield and analyzes the financial health of a company and its
ability to maintain dividend increases by including a blend of
historical and forward looking factors to screen for high quality
dividend-growers.
High quality dividends are often associated with larger,
well-established companies. However, smaller companies with strong
balance sheets and financial flexibility may also provide a good
source of income as well as capital appreciation and dividend
growth potential. “In our opinion, dividends are often a sign of
strong corporate health, and dividend increases may signal growing
confidence from management. While many dividend ETFs focus on
large-cap stocks, we believe strong dividend policies are just as
important for small- and mid-cap stocks. This ETF seeks to provide
exposure to small- and mid-cap stocks that may be well-positioned
for dividend growth.” said Ryan Issakainen, CFA, Senior Vice
President, Exchange-Traded Fund Strategist at First Trust.
For more information about First Trust, please contact Ryan
Issakainen at (630) 765-8689 or RIssakainen@FTAdvisors.com.
About First Trust
First Trust Advisors L.P., along with its affiliate First Trust
Portfolios L.P., are privately held companies which provide a
variety of investment services, including asset management and
financial advisory services, with collective assets under
management or supervision of approximately $111 billion as of
September 30, 2017 through unit investment trusts, exchange-traded
funds, closed-end funds, mutual funds and separate managed
accounts. First Trust is based in Wheaton, Illinois. For more
information, visit http://www.ftportfolios.com.
You should consider the fund’s investment objectives, risks,
and charges and expenses carefully before investing. Contact First
Trust Portfolios L.P. at 1-800-621-1675 to obtain a prospectus or
summary prospectus which contains this and other information about
the fund. The prospectus or summary prospectus should be read
carefully before investing.
ETF Characteristics
The fund lists and principally trades its shares on The Nasdaq
Stock Market LLC.
The fund's return may not match the return of the Nasdaq US
Small Mid Cap Rising Dividend Achievers Index. Securities held by
the fund will generally not be bought or sold in response to market
fluctuations.
Investors buying or selling fund shares on the secondary market
may incur customary brokerage commissions. Market prices may differ
to some degree from the net asset value of the shares. Investors
who sell fund shares may receive less than the share's net asset
value. Shares may be sold throughout the day on the exchange
through any brokerage account. However, unlike mutual funds, shares
may only be redeemed directly from the fund by authorized
participants, in very large creation/redemption units. If the
fund's authorized participants are unable to proceed with
creation/redemption orders and no other authorized participant is
able to step forward to create or redeem, fund shares may trade at
a discount to the fund's net asset value and possibly face
delisting.
Risk Considerations
The fund's shares will change in value, and you could lose money
by investing in the fund. One of the principal risks of investing
in the fund is market risk. Market risk is the risk that a
particular stock owned by the fund, fund shares or stocks in
general may fall in value. There can be no assurance that the
fund's investment objective will be achieved.
The prices of equity securities fluctuate for several reasons,
including changes in investors’ perceptions of the financial
condition of an issuer or the general condition of the relevant
stock market, such as market volatility, or when political or
economic events affecting the issuers occur.
The fund currently has fewer assets than larger funds, and like
other relatively new funds, large inflows and outflows may impact
the fund’s market exposure for limited periods of time.
The fund may invest in securities issued by companies
concentrated in a particular industry. The fund may invest in small
capitalization and mid capitalization companies. Such companies may
experience greater price volatility than larger, more established
companies.
There is no guarantee that the issuers of the securities in the
portfolio will declare dividends in the future or that, if
declared, they will either remain at current levels or increase
over time.
As the use of Internet technology has become more prevalent in
the course of business, the fund has become more susceptible to
potential operational risks through breaches in cyber security.
Such events could cause the funds to incur regulatory penalties,
reputational damage, additional compliance costs associated with
corrective measures and/or financial loss.
If the fund has lower average daily trading volumes, it may rely
on a small number of third-party market makers to provide a market
for the purchase and sale of shares.
The fund is classified as "non-diversified" and may invest a
relatively high percentage of its assets in a limited number of
issuers. As a result, the fund may be more susceptible to a single
adverse economic or regulatory occurrence affecting one or more of
these issuers, experience increased volatility and be highly
concentrated in certain issuers.
First Trust Advisors L.P. is the adviser to the fund. First
Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P.,
the fund's distributor.
The information presented is not intended to constitute an
investment recommendation for, or advice to, any specific person.
By providing this information, First Trust is not undertaking to
give advice in any fiduciary capacity within the meaning of ERISA
and the Internal Revenue Code. First Trust has no knowledge of and
has not been provided any information regarding any investor.
Financial advisors must determine whether particular investments
are appropriate for their clients. First Trust believes the
financial advisor is a fiduciary, is capable of evaluating
investment risks independently and is responsible for exercising
independent judgment with respect to its retirement plan
clients.
Nasdaq® and Nasdaq US Small Mid Cap Rising Dividend Achievers
Index are registered trademarks and service marks of Nasdaq, Inc.
(which with its affiliates is referred to as the "Corporations")
and are licensed for use by First Trust Advisors L.P. The fund has
not been passed on by the Corporations as to its legality or
suitability. The fund is not issued, endorsed, sold, or promoted by
the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR
NO LIABILITY WITH RESPECT TO THE FUND.
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version on businesswire.com: http://www.businesswire.com/news/home/20171102005866/en/
First TrustRyan Issakainen(630)
765-8689RIssakainen@FTAdvisors.com
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