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

Core Viewpoint - The First Trust Rising Dividend Achievers ETF (RDVY) is a passively managed ETF that aims to provide broad exposure to the Large Cap Value segment of the US equity market, with significant assets under management and a focus on dividend-paying companies [1][7]. Group 1: ETF Overview - RDVY was launched on January 7, 2014, and has accumulated over $15.46 billion in assets, making it one of the larger ETFs in its category [1]. - The ETF has an annual operating expense ratio of 0.48% and a 12-month trailing dividend yield of 1.44% [4]. - It seeks to match the performance of the NASDAQ US Rising Dividend Achievers Index, which includes companies with a history of paying dividends [7]. Group 2: Market Characteristics - Large cap companies, typically with market capitalizations above $10 billion, are considered more stable with predictable cash flows and lower volatility compared to mid and small cap companies [2]. - Value stocks, which RDVY focuses on, generally have lower price-to-earnings and price-to-book ratios, and while they have lower sales and earnings growth rates, they have historically outperformed growth stocks in most markets [3]. Group 3: Sector Exposure and Holdings - The ETF has a significant allocation to the Financials sector, comprising about 36.5% of the portfolio, followed by Information Technology and Industrials [5]. - Meta Platforms Inc. (META) accounts for approximately 2.3% of total assets, with the top 10 holdings representing about 22.2% of total assets under management [6]. Group 4: Performance Metrics - As of August 1, 2025, RDVY has gained approximately 7.84% year-to-date and 9.92% over the past year, with a trading range between $51.60 and $64.37 in the past 52 weeks [7]. - The ETF has a beta of 1.07 and a standard deviation of 18.88% over the trailing three-year period, indicating a medium risk profile [8]. Group 5: Alternatives and Market Position - RDVY carries a Zacks ETF Rank of 3 (Hold), suggesting it is a sufficient option for investors seeking exposure to the Large Cap Value area [9]. - Alternative ETFs in this space include the Schwab U.S. Dividend Equity ETF (SCHD) with $69.21 billion in assets and an expense ratio of 0.06%, and the Vanguard Value ETF (VTV) with $139.05 billion in assets and an expense ratio of 0.04% [10]. Group 6: Investor Appeal - Passively managed ETFs like RDVY are increasingly favored by retail and institutional investors due to their low costs, transparency, flexibility, and tax efficiency, making them suitable for long-term investment strategies [11].