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First Trust Dow Jones Global Select Dividend Index Fund (FGD): Dividends around the World

First Trust Dow Jones Global Select Dividend Index Fund (FGD) tracks the Dow Jones Global Select Dividend IndexSM and seeks investments that correspond generally to the price and yield (before the fund’s fees and expenses) of this index. The fund will normally invest at least 90% of its net assets (including investment borrowings) in the common stocks and depositary receipts that comprise the index. The index is an indicated annual dividend yield weighted index of 100 stocks selected from the developed-market portion of the Dow Jones World IndexSM.

The Index universe is defined as all component companies of the 25 developed-market country indexes in the Dow Jones Global Indexes (DJGI) family.

To be considered for the Index, companies in the Index universe must pass eligibility screens for dividend quality and liquidity. The company must:

  • Pay a current dividend.
  • Have a current-year dividend-per-share ratio that is greater than or equal to its five-year average annual dividend-per-share ratio.
  • Have a five-year average payout ratio of less than or equal to 60% for U.S. and European companies; or less than or equal to 80% for all other countries.
  • Have a minimum three-month daily average trading volume of $3 million.
  • Stocks meeting all eligibility requirements are ranked by dividend yield.

The top 100 highest-yielding stocks are selected for inclusion in the Index, subject to buffers designed to limit turnover by favoring current Index components:

  • Stocks in the Index universe are ranked in descending order by indicated annual dividend yield, defined as a stock’s unadjusted indicated annual dividend (not including any special dividends) divided by its unadjusted price.
  • All current Index component stocks that are among the top 150 stocks are included in the Index.
  • Non-component stocks are added to the Index based on their rankings until the component count reaches 100.
  • Component weightings are assigned based on dividend yield. Weights of individual component stocks are capped at 10%.

The Index is reconstituted and adjusted annually in March.

This ETF is rated 3 stars by Morningstar. And it’s Top Three holdings are:

Labrador Iron Ore Royalty Corp (LIF.TO) has a market cap of 2.695 billion and holds a 15.10% equity interest in Iron Ore Company of Canada (IOC) that produces and processes an iron ores at Labrador City, Newfoundland and Labrador. IOC produces seaborne iron ore pellets; and sells standard and low silica acid, flux, and direct reduction pellets, as well as iron ore concentrate.

Fortescue Metals Group Ltd (FMG.AX) is an Australian company that explores, develops, produces, processes, and sells iron ore in Australia, China, and internationally. It also explores for copper and gold deposits. The company’s market cap is $68.938 billion.

Enagas SA (ENG.BC) is headquartered in Spain and develops, operates, and maintains gas infrastructures in Spain, Mexico, Chile, Peru, Albania, Greece, Italy, and the United States. It operates through Gas transmission, Regasification, and Storage of Gas segments. The market cap of ENG is $4.737 billion.

The majority of the fund is invested in non-U.S. assets (83.84%) and 15.69% is invested in U.S. assets.

The 2021 forecast for global stocks is excellent – below trend in early 2021, but the strongest global recovery in a decade will play out by the end of 2021 if the vaccine prospects play out as expected, according to J.P. Morgan Global Research.

Holdings Style 

Stock Style
Value Blend Growth
Large 39 6 0
Medium 35 3 0
Small 11 3 0
Source: Morningstar.com

 

Top 10 Holdings

Name Sector % of
Market Value
Labrador Iron Ore Royalty Corp LIF.TO 1.8%
Fortescue Metals Group Ltd FMG.AX 1.7%
Enagas SA ENG.BC 1.7%
Meritz Securities Co Ltd 008560.KS 1.6%
Telefonica SA TEF.BC 1.6%
British American Tobacco PLC BATS.L 1.6%
Altria Group Inc MO 1.4%
Centamin PLC CEY 1.4%
Industrial Bank of Korea 024110.KS 1.4%
Mapfre SA MAP.BC 1.4%
Source: FinanceYahoo.com

 

Top Institutional Holders

Name Reporting Date Total Holdings Position Value
Wells Fargo & Company 2/9/2021 978.7k $21.5M
Sawtooth Solutions 2/9/2021 813.3k $17.8M
AE Wealth Management 4/27/2021 793.5k $19.9M
Morgan Stanley 2/16/2021 770.7k $16.9M
Raymond James & Associates 2/12/2021 434.4k $9.5M
LPL Financial 2/12/2021 328.9k $7.2M
Park National Corp. 4/1/2021 304.8k $7.7M
Bank of America Corp. 2/10/2021 278.7k $6.1M
UBS Group 2/11/2021 193.3k $4.2M
Royal Bank of Canada 2/16/2021 182.9k $4.0M
Source: https://fintel.io/so/us/fgd

 

First Trust Dow Jones Global Select Dividend First Trust Dow Jones Global Index Fund (FGD)
Net Asset Value: $25.96

Performance: 

Y-T-D: 18.51%
1-year: 63.09%
3-year: 5.79%
5-year: 7.68%

Risk Rating: High

Expense Ratio: 0.570%

Dividend yield: 3.95%

Website: ftportfolios.com/retail/etf/etfsummary.aspx?Ticker=FGD

Category: U.S. Fund Foreign Large Value

Largest Sectors:

  • Financial Services
  • Communication Services
  • Basic Materials

Largest Holdings:

  • Labrador Iron Ore Royalty
  • Fortescue Metals Group
  • Enagas SA
  • Mertiz Securities Co.
  • Telefonica SA
Largest Institutional investors:

  • Wells Fargo & Company
  • Sawtooth Solutions
  • AE Wealth Management


Technical Analysis: First Trust Dow Jones Global Select Dividend ETF
by Kate Stalter

This ETF is working on its seventh month in a row of upside price action, and is trading at its best levels in three years.

The fund returned 18.94% year-to-date and 63.09% on a one-year basis.

A couple things are driving performance. While domestic small caps continue to outperform international small stocks, this fund’s tilt toward high dividend payers gives it a boost. Also, fund managers tend to invest in stocks with higher volatility relative to others. This strategy pays off during market uptrends, as we’re now seeing.

The fund has been on a solid uptrend all year. It cleared an area of tight trade in early January, then traveled higher, holding above its 10-week moving average.

One possible inhibitor to future gains is the fund’s size. With only $649 million under management, it’s clearly not on the radar of big institutional investors who can buy in bulk and send the price higher.

Nonetheless, recent performance makes this an interesting holding at the moment. Its up/down volume ratio is 1.4, meaning upside volume over the last 50 trading days was 40% higher than downside. That’s exactly what you want to see in an investment.

FGD-043021

Source: Stockcharts.com

Funds Inflows/Outflows

Top 10 Creations
Ticker Fund Name
Net Flows
VTI Vanguard Total Stock Market ETF 3,911.03
VOO Vanguard S&P 500 ETF 3,205.71
VGSH Vanguard Short-Term Treasury Index ETF 2,373.57
BND Vanguard Total Bond Market ETF 2,261.66
VTV Vanguard Value ETF 2,137.89
IVV iShares Core S&P 500 ETF 2,007.65
AGG iShares Core U.S. Aggregate Bond ETF 1,953.65
SCHD Schwab U.S. Divdend Equity ETF 1,762.71
GOVT iShares U.S. Treasury Bond ETF 1,722.50
BBEU JPMorgan BetaBuilders Europe ETF 1,475.51
Top 10 Redemptions
Ticker Fund Name
Net Flows
IWM iShares Russell 2000 ETF -2,748.55
SPY SPDR S&P 500 ETF Trust -2,517.98
TLT iShares 20+ Year Treasury Bond ETF -1,544.90
TQQQ ProShares UltraPro QQQ -1,467.36
SHV iShares Short Treasury Bond ETF -963.66
GLD SPDR Gold Trust -855.10
MBB iShares MBS ETF -661.14
XLP Consumer Staples Select Sector SPDR Fund -640.82
IEI iShares 3-7 Year Treasury Bond ETF -601.25
USMV iShares MSCI USA Min Vol Factor ETF -594.84

Source: ETF.com

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