Should First Trust Rising Dividend Achievers ETF (RDVY) Be on Your Investing Radar?

The First Trust Rising Dividend Achievers ETF (RDVY) was launched on January 7, 2014, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by First Trust Advisors. It has amassed assets over $15.46 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.48%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.44%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector -- about 36.5% of the portfolio. Information Technology and Industrials round out the top three.

Looking at individual holdings, Meta Platforms Inc. (class A) (META) accounts for about 2.3% of total assets, followed by Booking Holdings Inc. (BKNG) and Jpmorgan Chase & Co. (JPM).

The top 10 holdings account for about 22.2% of total assets under management.

Performance and Risk

RDVY seeks to match the performance of the NASDAQ US Rising Dividend Achievers Index before fees and expenses. The NASDAQ US Rising Dividend Achievers Index is designed to provide access to a diversified portfolio of companies with a history of paying dividends.

The ETF has gained about 7.84% so far this year and is up about 9.92% in the last one year (as of 08/01/2025). In the past 52-week period, it has traded between $51.60 and $64.37.

The ETF has a beta of 1.07 and standard deviation of 18.88% for the trailing three-year period, making it a medium risk choice in the space. With about 77 holdings, it effectively diversifies company-specific risk.

Story Continues## Alternatives

First Trust Rising Dividend Achievers ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RDVY is a sufficient option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $69.21 billion in assets, Vanguard Value ETF has $139.05 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

First Trust Rising Dividend Achievers ETF (RDVY): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments