First Trust SMID Cap Rising Dividend Achievers ETF

Frequently Asked Questions About SDVY

What does SDVY invest in?

The First Trust SMID Cap Rising Dividend Achievers ETF (SDVY) is designed to mirror the overall performance—both market value and income, before any fund fees and expenses—of a specific benchmark: the Nasdaq US Small Mid Cap Rising Dividend Achievers Index. Typically, the fund commits a minimum of 90% of its total assets to the securities that make up this Index. The Index itself is comprised of a curated selection of smaller and medium-sized companies. These firms are chosen for their consistent track record of boosting their dividend payments, alongside possessing the financial characteristics that suggest they are well-positioned to continue this dividend growth into the future. The process for selecting companies for the Index involves a careful evaluation of several factors, including their profit expansion, the strength of their balance sheet (specifically their cash holdings relative to debt), and the percentage of their earnings that they distribute to shareholders as dividends.

What is the expense ratio of SDVY?

First Trust SMID Cap Rising Dividend Achievers ETF (SDVY) charges an expense ratio of 0.58%. This is the annual fee deducted from fund assets to cover management and operations.

What is SDVY's distribution yield?

SDVY's trailing-twelve-month yield is 1.00%, calculated from the sum of distributions over the past year divided by the current price.

How does SDVY's covered-call strategy work?

SDVY sells call options against the stocks (or index) it holds, collecting premium income that gets passed through to shareholders as distributions. The strategy generates above-market income in flat or rising markets but caps upside. When the underlying rallies past the strike, the gains above the strike go to the option buyer, not the fund.

How big is SDVY?

First Trust SMID Cap Rising Dividend Achievers ETF (SDVY) manages $11.43B in total assets. AUM determines bid-ask liquidity and the fund's vulnerability to closure. Funds below ~$50M are at higher risk of liquidation.

Is SDVY actively managed or an index fund?

SDVY's management style is described in the fund's prospectus. See the description on the Summary tab for the published strategy.