First Trust launches low volatility value ETF

James Baxter-Derrington
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First Trust launches low volatility value ETF

First Trust has announced the launch of the First Trust Value Line Dividend Ucits ETF (FVD), a "safety first" product.

The fund is based on the existing US version, which saw $4bn inflows across 2019, and tracks the group's Value Line Dividend index.

FVD utilises the index's methodology, which seeks companies with a high dividend yield and historically low volatility, and will select only the safest of those firms.

If a company fails to score a 1 or a 2 safety ranking, it is excluded, and from those FVD will select companies that have a higher dividend yield than the S&P 500 Composite index and a market cap of $1bn or greater.

The fund is listed on the London Stock Exchange from 14 February with a total expense ratio of 0.7%.

Gregg Guerin, senior product specialist at First Trust, said: "We are pleased to be expanding our ETF offering with the launch of a quality and low volatility factor-based fund.

"The latest addition to our equity solutions is a safety first strategy that can provide investment managers with the potential for greater downside protection during periods of market volatility.

"In fact, in the most recent decade, the index methodology has not only stood firm on the downside but has also outperformed the S&P 500 across all major market corrections."

 

This article was first published by sister publication InvestmentWeek.co.uk