First Trust Morningstar Dividend Leaders Index Fund [FDL] Stock Forecast

Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the First Trust Morningstar Dividend Leaders ETF (FDL), a passively managed exchange traded fund launched on 03/09/2006.

FDL: The Dividend Leaders In The ETF Might Not Meet Expectations.

After the closing bell on Apr 20, International Business Machines (IBM) reported solid first-quarter 2023 results. This has put ETFs having the highest allocation to this tech giant in the spotlight.

Investing in dividend-paying stocks has proved to be a helpful strategy, outperforming global markets over the long term. Dividend income strategies play an important role for multi-asset income portfolios. But they can also run the risk of being too narrowly focused, which can limit both income potential and upside participation when equity markets rise.

Style Box ETF report for FDL

Style Box ETF report for FDL

This article summarizes the performance of the entire U.S. equity market by examining 1Y, 3Y, 5Y, and 10Y returns for 850+ ETFs across 40 categories. Major indices declined, but investing in Energy, High-Dividend, and Large-Cap Value ETFs softened the blow. Meanwhile, searching for the bottom in mega-cap growth and thematic ETFs didn't work.

High-dividend ETFs are just about the only diversified funds up this year. And most of them agree on the S&P 500 stocks you need to own.

The First Trust Morningstar Dividend Leaders ETF invests in companies that have maintained consistent and sustainable dividends with an eye toward total returns. The portfolio holds 100 companies and is currently skewed toward the energy sector with Exxon being the #1 holding with an 11.5% weight. Exxon currently yields 3.22%.

The ALPS Sector Dividend Dogs ETF (SDOG), a deep value portfolio, is a compelling offering in the current environment.   The pure value factor has continued to outperform growth in the current rising interest rate environment and is outpacing pure growth by an astounding amount year-to-date.