Designed to provide broad exposure to the Technology ETFs category of the market, the ProShares S&P Technology Dividend Aristocrats ETF (TDV) is a smart beta exchange traded fund launched on 11/05/2019.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Proshares. TDV has been able to amass assets over $258.39 million, making it one of the average sized ETFs in the Technology ETFs. Before fees and expenses, this particular fund seeks to match the performance of the S&P TECHNOLOGY DIVIDEND ARISTOCRATS INDX.
The S&P Technology Dividend Aristocrats Index targets companies from information technology, internet and direct marketing retail, interactive home entertainment, and interactive media and services segments of the economy.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.45%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.14%.
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.
For TDV, it has heaviest allocation in the Information Technology sector --about 79.10% of the portfolio --while Financials and Industrials round out the top three.
When you look at individual holdings, Csg Systems Intl Inc (CSGS) accounts for about 3.21% of the fund's total assets, followed by Badger Meter Inc (BMI) and Amphenol Corp-Cl A (APH).
The top 10 holdings account for about 27.74% of total assets under management.
Performance and Risk
Year-to-date, the ProShares S&P Technology Dividend Aristocrats ETF has added roughly 10.87% so far, and it's up approximately 10.84% over the last 12 months (as of 12/24/2024). TDV has traded between $66.55 and $79.24 in this past 52-week period.
The fund has a beta of 1.04 and standard deviation of 20.32% for the trailing three-year period. With about 36 holdings, it has more concentrated exposure than peers.
Alternatives
ProShares S&P Technology Dividend Aristocrats ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Core Dividend Growth ETF (DGRO) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $29.89 billion in assets, Vanguard Dividend Appreciation ETF has $86.26 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
Bottom Line
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.
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Get it free >>ProShares S&P Technology Dividend Aristocrats ETF (TDV): ETF Research Reports
Badger Meter, Inc. (BMI) : Free Stock Analysis Report
Amphenol Corporation (APH) : Free Stock Analysis Report
CSG Systems International, Inc. (CSGS) : Free Stock Analysis Report
Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports
iShares Core Dividend Growth ETF (DGRO): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
