Is ProShares Russell 2000 Dividend Growers ETF (SMDV) a Strong ETF Right Now?

Launched on 02/03/2015, the ProShares Russell 2000 Dividend Growers ETF (SMDV) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Value category of the market.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

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.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

Because the fund has amassed over $801.25 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Value. SMDV is managed by Proshares. SMDV seeks to match the performance of the Russell 2000 Dividend Growth Index before fees and expenses.

The Russell 2000 Dividend Growth Index targets companies that are currently members of the Russell 2000 Index and have increased dividend payments each year for at least 10 years.

Cost & Other Expenses

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.

SMDV's 12-month trailing dividend yield is 2.80%.

Performance and Risk

So far this year, SMDV has lost about -3.86%, and is up roughly 0.14% in the last one year (as of 01/15/2024). During this past 52-week period, the fund has traded between $53.56 and $66.96.

The ETF has a beta of 0.82 and standard deviation of 18.63% for the trailing three-year period, making it a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.

Alternatives

ProShares Russell 2000 Dividend Growers ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

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 $25.19 billion in assets, Vanguard Dividend Appreciation ETF has $74.26 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 Style Box - Small Cap Value.

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.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.

Get it free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ProShares Russell 2000 Dividend Growers ETF (SMDV): ETF Research Reports

ABM Industries Incorporated (ABM) : Free Stock Analysis Report

Arbor Realty Trust (ABR) : Free Stock Analysis Report

Alamo Group, Inc. (ALG) : Free Stock Analysis Report

Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports

iShares Core Dividend Growth ETF (DGRO): ETF Research Reports

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.