Investment management firms regularly adjust their investment portfolios based on their market outlook, financial targets and overall investment strategies. One such company, Cetera Investment Advisers, recently reduced its stake in shares of First Trust SMID Cap Rising Dividend Archievers ETF (NASDAQ:SDVY) by 25.5%, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor sold 119,282 shares during the period, leaving it with a total of 347,877 shares in First Trust SMID Cap Rising Dividend Archievers ETF worth $9,062,000 as of the most recent SEC filing.
The timing of this move is interesting and could be indicative of a shift in market sentiment regarding small cap dividend stocks. Since this ETF focuses on small-to-medium-sized companies that pay rising dividends, with a particular emphasis on undervalued businesses in the market segment where rising payouts are expected to continue over time. It is possible that Cetera Investment Advisers no longer sees high growth potential in this area.
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It is also worth noting that First Trust SMID Cap Rising Dividend Archievers ETF recently declared a quarterly dividend which was equitably paid out on March 31st to stockholders who had been listed as such by Monday the 27th of March while ex-dividend trading took place on Friday March 24th. This quarterly dividend represents an annualized amount of $0.53 per share and translate into a dividend yield of approximately 1.90%.
In conclusion, Cetera Investment Advisers’ decision to cut its stake once more highlights that investing diversification should always be supported by discipline and vigilance beyond industry trends or indexes movements alone. A move like this could be part of a strategic portfolio rebalancing or it could signal cut losses on a declining market trend related to SDVY at the moment. Ultimately, it is difficult to determine why this decision was made, but it should nevertheless serve as food for thought for investors in small-cap dividend stocks.
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SDVY: A Rising Dividend Achievers ETF Catching the Attention of Investors and Analysts
First Trust SMID Cap Rising Dividend Achievers ETF (SDVY) has caught the attention of investors and financial analysts in recent years, with several large investors modifying their holdings of the company. In the last quarter, Tyler Stone Wealth Management acquired a new position worth $180,000 while Nelson Van Denburg & Campbell Wealth Management Group LLC increased its stake in shares by 6%. Atlas Wealth LLC and PCG Wealth Advisors LLC also ventured into SDVY with new positions valued at over $1 million each.
SDVY primarily invests in extended market equity and tracks an equal-weighted index of small- and mid-cap US companies meeting specific fundamental criteria. The track record of these firms needs to have good dividends while still adhering to certain other investment criteria. These factors make it appealing for potential investors seeking an exchange-traded fund that is focused on a particular niche.
The value of SDVY is not just in the fund’s performance but also in its management team led by First Trust. Their expertise and guidance have contributed significantly to delivering impressive results for current shareholders. Since its launch back in November 2017, SDVY has been able to maintain an optimal benchmark, thanks to its innovation and resilience.
Despite experiencing fluctuations through 2020 due to Covid-19 and unforeseen market twists caused by it, SDVY has managed to open strong on Tuesday past week with shares trading from $22.77 up to a cap of $29.89 with a beta marginally above 1 which displays the risk involved with investing in this asset class relative to broader markets.
In conclusion, as more large investments are made into SDVY, it has become evident that this exchange-traded fund runs on a unique course filled with growth opportunities for those willing to take risks based on thorough research analysis and investment philosophy. It continues proving useful for businesses operating within the capital-intensive middle sector of our economy, accumulating steady plowback ratios and offering stable recurring dividends — all of which are instrumental in generating returns for those who capitalize on the initiative.