First Trust Dividend ETF Seeks Growing Income for Investors

The First Trust Rising Dividend Achievers ETF (RDVY) targets passive income growth by investing in companies demonstrating a commitment to increasing their dividend payouts. This strategy differentiates itself from funds solely focused on current yield, aiming instead for a rising income stream over the long term.

While the ETF currently reports a 0.83% dividend yield, its core investment thesis revolves around dividend growth. Data indicates that an investor in RDVY since its January 2014 inception at $19.93 per share has experienced substantial appreciation, with the price now exceeding $82, representing over a 300% increase. Furthermore, the yield on initial cost basis has grown from approximately 2.1% in the first year to 3.4% currently, with distributions per share rising from $0.42 to $0.68.

The ETF's methodology screens for companies with consistent dividend growth, selecting up to 50 holdings for its portfolio, which undergoes regular reconstitution and rebalancing.

Key Data Points for RDVY: AUM: $26 billion Dividend Yield: 0.83% Expense Ratio: 0.47% Top Holdings: - Lam Research Corp. (LRCX): 3.04% - Applied Materials Inc. (AMAT): 2.95% - BNY Mellon Corp. (BK): 2.39%