FTDS: Why First Trust's Dividend Strength ETF Is Not Worth Owning

  • FTDS equally weights 50 dividend-paying stocks that pass screens for debt, ROE, dividend payout ratios, and dividend growth. Its ER is 0.70% and the ETF has $25 million in AUM. I recreated the selection process and determined FTDS is designed to favor Financials and Industrials. Notably, the payout ratio screen means safer sectors like Consumer Staples and Utilities are ignored. FTDS has some pretty attractive surface-level fundamental statistics, but on a sector-adjusted basis, it underwhelms. In this article, I'll compare it alongside DVY, IWD, SDY, and VIG.