Launched on 11/05/2019, the ProShares S&P Technology Dividend Aristocrats ETF (TDV) is a smart beta exchange traded fund offering broad exposure to the Technology ETFs 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Proshares. It has amassed assets over $239.83 million, making it one of the average sized ETFs in the Technology ETFs. This particular fund seeks to match the performance of the S&P TECHNOLOGY DIVIDEND ARISTOCRATS INDX before fees and expenses.
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
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.
Operating expenses on an annual basis are 0.45% for TDV, making it one of the cheaper products in the space.
TDV's 12-month trailing dividend yield is 1.31%.
Performance and Risk
The ETF has gained about 18.13% and it's up approximately 13.49% so far this year and in the past one year (as of 11/29/2023), respectively. TDV has traded between $54.26 and $67.88 during this last 52-week period.
TDV has a beta of 1.06 and standard deviation of 20.12% for the trailing three-year period. With about 38 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 $24.07 billion in assets, Vanguard Dividend Appreciation ETF has $69.98 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
Apple Inc. (AAPL) : Free Stock Analysis Report
Accenture PLC (ACN) : Free Stock Analysis Report
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Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports
iShares Core Dividend Growth ETF (DGRO): ETF Research Reports
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