New Listing

First Trust unveils small and mid-cap dividend achievers ETF

TER 0.60%

Theo Andrew


First Trust Global Portfolios has expanded its range with the launch of a dividend achievers ETF, ETF Stream can reveal.

The First Trust SMD Rising Dividend Achievers UCITS ETF (SDVY) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.60%.

SDVY tracks the Nasdaq US Small Mid Cap Rising Dividend Achievers index, offering exposure to smaller companies that have showcased dividend growth over the past three to five years.

The index will screen companies based on their historical dividend growth, earnings stability, cash-to-debt ratio and payout ratio.

The performance of small-cap stocks relative to their larger counterparts is at its lowest level in 20 years, Rupert Haddon, managing director at First Trust, said.

"Despite the challenges facing small-cap stocks, there are signs of optimism for their future performance, especially when we read the fundamental data,” he added.

“If interest rates start to decrease and earnings improve, we believe the outlook for small-cap stocks will regain favour.

“With SDVY, investors can benefit from a focus on both historical dividend growth and forward-looking fundamentals, providing investors with a liquid, transparent and cost-effective solution to allocating to a resilient portfolio.”

Haddon added the ETF will target wealth managers, discretionary fund managers, advisers and institutional investors.

It is the latest launch since the US asset manager expanded its thematics range with the launch of two ETFs, the First Trust Indxx Future Economy Metals UCITS ETF (METL) and the First Trust Bloomberg Scarce Resources UCITS ETF (SCAR).

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