FDL - FDL: Dividend Aristocrats Are A Tired Old Strategy

2024-07-02 05:23:09 ET

Summary

• First Trust Morningstar Dividend Leaders Index Fund ETF is well-constructed, but passive dividend stock indexing has issues.
• FDL prioritizes dividend stability and growth, but market volatility and cyclical nature of dividend stocks pose risks.
• I prefer a more active approach to dividend stock investing over traditional buy and hold strategies like FDL.

The First Trust Morningstar Dividend Leaders Index Fund ( FDL ) is one I have followed for the majority of its 18-year history. Back in the early to middle stage of my investment advisory career, Morningstar was the place to go for mutual fund analysis and later, ETF analysis. They also provide credible stock research. It is easy to use, written in fairly plain language, and inexpensive to access. At one point in my career, I think I used nearly every advisor-focused product Morningstar offered, from the $199 version to the $35,000 annual subscription for the full-fledged research system. But those days are gone....

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