FDD - FDD: Alluring 6.5% Yield But Dismal Performance From This U.K.-Heavy ETF
2024-07-06 04:04:17 ET
Summary
- FDD aggregates 30 high-yield European stocks that were screened for dividend growth and dividend coverage.
- The UK, the Netherlands, and Germany are the key countries represented. Financial sector stocks account for 54.2%. There is no exposure to IT, consumer staples, health care, or real estate.
- FDD's strategy has delivered dismal returns in the past, with a negative annualized return over September 2007–June 2024.
- A 6.5% trailing twelve months dividend yield is alluring, but a Buy rating is illogical assuming drab past performance.
Continuing my series of articles dissecting international equity exchange-traded funds, today I would like to initiate coverage of the First Trust STOXX® European Select Dividend Index Fund ETF ( FDD ). In essence, FDD is a passively managed investment vehicle that amalgamates value as well as dividend growth and dividend quality factors in a portfolio of European stocks (not limited to the EU or the euro area). Value is measured using the dividend yield, with top-yielding names occupying the key spots....
FDD: Alluring 6.5% Yield But Dismal Performance From This U.K.-Heavy ETF