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First Trust STOXX® European Select Dividend Index Fund (FDD)
Investment Objective/Strategy - First Trust STOXX® European Select Dividend Index Fund is an exchange-traded fund. The investment objective of the Fund is to seek investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the STOXX® Europe Select Dividend 30 Index.
There can be no assurance that the Fund's investment objectives will be achieved.
  • The Index is a dividend weighted index of 30 stocks selected from the STOXX® Europe 600 Index which includes high-dividend yielding companies across 18 European countries.
  • The universe of stocks consists of dividend-paying companies in the STOXX® Europe 600 Index that have a positive five year dividend-per-share growth rate and a dividend to earnings-per-share ratio of 60% or less.
  • Companies in the STOXX® Europe 600 Index universe are sorted by country and ranked in descending order according to their indicated annual net dividend yield. In the case of multiple stocks for a single company, the highest-yielding stock is chosen.
  • All current components of the Index are added to the selection list automatically.
  • For each company an "outperformance factor" is calculated: company net dividend yield divided by the net dividend yield of the respective region or county minus 1.
  • All companies are then sorted by their "outperformance factor."
    • All current components in the Index that are ranked 60 or higher in the selection list remain in the Index. Starting from the highest-ranked non-component in the selection list, companies are added to the Index until the final component count of 30 is reached.
    • A company's weight in the Index is based on its net dividend yield. Each component's weight is capped at 15%.
Fund Overview
TickerFDD
Fund TypeForeign Equity Income
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
CUSIP33735T109
Intraday NAVFDDIV
Fiscal Year-End09/30
ExchangeNYSE Arca
Inception8/27/2007
Inception Price$30.00
Inception NAV$30.00
Rebalance FrequencyAnnual
Gross Expense Ratio*0.70%
Net Expense Ratio*0.60%
* As of 3/31/2014
Expenses are capped contractually at 0.60% per year, at least until January 31, 2016.
Current Fund Data (as of 7/29/2014)
Closing NAV1$14.67
Closing Share Price2$14.69
Bid/Ask Midpoint$14.67
Bid/Ask Discount0.03%
Total Net Assets$177,612,326
Outstanding Shares12,103,334
Daily Volume108,532
Average 30-Day Daily Volume129,195
Closing Share Price 52-Week High/Low$15.55 / $12.00
Closing NAV 52-Week High/Low$15.46 / $11.94
Number of Holdings31
Fund Characteristics (as of 6/30/2014)7
Median Market Cap.$19,510
Maximum Market Cap.$268,731
Minimum Market Cap.$2,496
Price/Earnings11.14
Price/Book1.54
Price/Cash Flow7.88
Price/Sales0.79
Top Holdings (as of 7/29/2014)
Holding Percent
Seadrill Ltd 7.14%
Banco Santander S.A. 5.41%
Belgacom S.A. 5.31%
SSE Plc 4.17%
Zurich Insurance Group AG 4.04%
E.ON SE 4.01%
Orange 3.96%
Catlin Group Limited 3.86%
Amlin Plc 3.78%
BAE Systems Plc 3.52%

Holdings are subject to change.

Top Country Exposure (as of 7/29/2014)
Country Percent
United Kingdom 33.32%
Switzerland 16.48%
France 11.30%
Bermuda 11.04%
Germany 6.35%
Spain 5.43%
Belgium 5.33%
The Netherlands 5.28%
Italy 3.38%
Sweden 2.09%
Bid/Ask Midpoint and NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt3$0.3338
30-Day SEC Yield (as of 6/30/2014)44.58%
12-Month Distribution Rate (as of 6/30/2014)53.53%
Index Yield (as of 6/30/2014)65.60%
Bid/Ask Midpoint vs. NAV (as of 6/30/2014)
Number of Days Bid/Ask Midpoint Above NAV
Quarter Ended 0-49
Basis Points
50-99
Basis Points
100-199
Basis Points
>=200
Basis Points
6/30/2014 36 25 1 0
3/31/2014 28 28 0 0
12/31/2013 40 22 2 0
9/30/2013 25 36 0 0
Number of Days Bid/Ask Midpoint Below NAV
Quarter Ended 0-49
Basis Points
50-99
Basis Points
100-199
Basis Points
>=200
Basis Points
6/30/2014 1 0 0 0
3/31/2014 3 1 0 1
12/31/2013 0 0 0 0
9/30/2013 3 0 0 0

The price used to calculate market return is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange, on which shares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated.

Top Sector Exposure (as of 7/29/2014)
Financials 40.41%
Utilities 14.97%
Energy 13.10%
Telecommunication Services 11.02%
Industrials 6.56%
Consumer Staples 6.40%
Health Care 5.64%
Consumer Discretionary 1.90%
Month End Performance (as of 6/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV 7.50% 13.27% 37.38% 6.40% 11.52% N/A -5.02%
After Tax Held 6.49% 12.00% 35.24% 4.48% 9.67% N/A -6.71%
After Tax Sold 4.25% 7.50% 21.10% 3.98% 8.26% N/A -4.35%
Market Price 7.39% 12.46% 38.11% 6.50% 11.51% N/A -4.97%
Index Performance **
STOXX® Europe Select Dividend 30 Index 7.51% 13.29% 38.41% 6.76% 11.98% N/A -4.51%
MSCI Europe Index 3.30% 5.48% 29.28% 8.67% 13.03% N/A 1.67%
STOXX® Europe 600 Index 2.98% 5.52% 29.81% 8.99% 13.42% N/A 1.93%
Quarter End Performance (as of 6/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV 7.50% 13.27% 37.38% 6.40% 11.52% N/A -5.02%
After Tax Held 6.49% 12.00% 35.24% 4.48% 9.67% N/A -6.71%
After Tax Sold 4.25% 7.50% 21.10% 3.98% 8.26% N/A -4.35%
Market Price 7.39% 12.46% 38.11% 6.50% 11.51% N/A -4.97%
Index Performance **
STOXX® Europe Select Dividend 30 Index 7.51% 13.29% 38.41% 6.76% 11.98% N/A -4.51%
MSCI Europe Index 3.30% 5.48% 29.28% 8.67% 13.03% N/A 1.67%
STOXX® Europe 600 Index 2.98% 5.52% 29.81% 8.99% 13.42% N/A 1.93%
3-Year Statistics (as of 6/30/2014)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FDD 16.02% -0.91 0.80 0.44 0.93
MSCI Europe Index 18.48% -0.26 0.99 0.52 1.00
STOXX® Europe 600 Index 18.57% --- 1.00 0.54 1.00
Standard Deviation is a measure of price variability (risk). Alpha is an indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.Beta is a measure of price variability relative to the market. Sharpe Ratio is a measure of excess reward per unit of volatility. Correlation is a measure of the similarity of performance.

*Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost.

After Tax Held returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold returns represent the return after taxes on distributions and the sale of fund shares. Returns do not represent the returns you would receive if you traded shares at other times. Market Price returns are based on the midpoint of the bid/ask spread. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. The fund's performance reflects fee waivers and expense reimbursements, absent which performance would have been lower.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

**Performance information for the STOXX® Europe Select Dividend 30 Index is for illustrative purposes only and does not represent actual fund performance. The Index does not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Indexes are unmanaged and an investor cannot invest directly in an index.

The gross expense ratio for this fund is 0.70%. Expenses are capped contractually at 0.60% per year, at least until January 31, 2016.

The MSCI Europe Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of 16 developed markets in Europe.

The STOXX® Europe 600 Index represents large, mid and small capitalization companies across 18 countries of the European region.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's shares outstanding.
2 Fund shares are purchased and sold on an exchange at their share price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 Most recent distribution paid or declared through today's date. Subject to change in the future.
4 30-day SEC yield is calculated by dividing the net investment income per share earned during the most recent 30-day period by the maximum offering price per share on the last day of the period.
5 12-Month Distribution Rate is calculated by dividing the sum of the fund's trailing 12-month ordinary distributions paid or declared by the NAV price. Distribution rates may vary.
6 Index yield represents the weighted average trailing 12-month dividend of the constituents of the STOXX® Europe Select Dividend 30 Index
7 All market capitalization numbers are in USD$ Millions.
8 Inception Date is 8/27/2007

You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or summary prospectus, or contact First Trust Portfolios L.P. at 1-800-621-1675 to request a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.

ETF Characteristics

The fund lists and principally trades its shares on the NYSE Arca, Inc.

The fund's return may not match the return of the STOXX® Europe Select Dividend 30 Index.  Securities held by the fund will generally not be bought or sold in response to market fluctuations.

The fund may not be fully invested at times. Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Market prices may differ to some degree from the net asset value of the shares. Investors who sell fund shares may receive less than the share's net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, unlike mutual funds, shares may only be redeemed directly from the fund by authorized participants, in very large creation/redemption units.

Risk Considerations

The fund's shares will change in value, and you could lose money by investing in the fund. One of the principal risks of investing in the fund is market risk. Market risk is the risk that a particular stock owned by the fund, fund shares or stocks in general may fall in value.

The fund may invest in securities issued by companies concentrated in a particular industry. The fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

An investment in a fund containing equity securities of foreign issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting foreign issuers.

The fund is classified as "non-diversified." A non-diversified fund generally may invest a larger percentage of its assets in the securities of a smaller number of issuers. As a result, the Fund may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence affecting these companies.

The STOXX Europe Select Dividend 30 Index and the trademarks used in the index name are the intellectual property of STOXX Limited, Zurich, Switzerland and/or its licensors. The index is used under license from STOXX. The ETF based on the index is in no way sponsored, endorsed, sold or promoted by STOXX and/or its licensors and neither STOXX nor its licensors shall have any liability with respect thereto.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
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First Trust Advisors L.P.
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