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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
ISINUS33735T1097
Intraday NAVFDDIV
Fiscal Year-End09/30
ExchangeNYSE Arca
Inception8/27/2007
Inception Price$30.00
Inception NAV$30.00
Rebalance FrequencyAnnual
Gross Expense Ratio*0.60%
Net Expense Ratio*0.60%
* As of 2/1/2016
Expenses are capped contractually at 0.60% per year, at least until January 31, 2017.
Current Fund Data (as of 7/22/2016)
Closing NAV1$11.72
Closing Share Price2$11.75
Bid/Ask Midpoint$11.76
Bid/Ask Premium0.29%
Total Net Assets$171,753,726
Outstanding Shares14,653,334
Daily Volume90,518
Average 30-Day Daily Volume158,816
Closing Share Price 52-Week High/Low$13.16 / $10.88
Closing NAV 52-Week High/Low$13.16 / $10.83
Number of Holdings31
Fund Characteristics (as of 6/30/2016)9
Maximum Market Cap.$220,268
Median Market Cap.$20,831
Minimum Market Cap.$1,337
Price/Earnings13.30
Price/Book1.17
Price/Cash Flow10.83
Price/Sales0.80
Top Holdings (as of 7/22/2016)
Holding Percent
Royal Dutch Shell Plc (Class B) 6.37%
Zurich Insurance Group AG 5.98%
Fortum Oyj 5.05%
SSE Plc 4.64%
GlaxoSmithKline Plc 4.44%
BB Biotech AG (Registered) 4.24%
Pearson Plc 4.19%
Carillion Plc 3.77%
AstraZeneca Plc 3.65%
Swiss Re AG 3.47%

Holdings are subject to change.

Top Country Exposure (as of 7/22/2016)
Country Percent
United Kingdom 29.43%
Switzerland 22.25%
France 15.67%
The Netherlands 9.32%
Germany 7.55%
Finland 5.08%
Spain 2.83%
Italy 2.72%
Sweden 2.62%
Belgium 2.53%
NAV History (Since Inception)
Past performance is not indicative of future results.
Overall Morningstar RatingTM (as of 6/30/2016)3

Among 92 funds in the Europe Stock category. This fund was rated 5 stars/92 funds (3 years), 3 stars/77 funds (5 years).
Distribution Information
Dividend per Share Amt4$0.4091
30-Day SEC Yield (as of 6/30/2016)55.36%
Unsubsidized 30-Day SEC Yield (as of 6/30/2016)65.34%
12-Month Distribution Rate (as of 6/30/2016)74.93%
Index Yield (as of 6/30/2016)85.54%
Bid/Ask Midpoint vs. NAV (as of 6/30/2016)
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
6/30/2016 43 6 0 0
3/31/2016 34 10 0 0
12/31/2015 32 6 1 0
9/30/2015 20 3 1 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
6/30/2016 12 3 0 0
3/31/2016 12 5 0 0
12/31/2015 21 4 0 0
9/30/2015 34 6 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 7/22/2016)
Financials 38.48%
Utilities 15.54%
Industrials 12.70%
Energy 9.47%
Health Care 8.15%
Telecommunication Services 4.51%
Materials 4.27%
Consumer Discretionary 4.22%
Consumer Staples 2.66%
Month End Performance (as of 6/30/2016)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) -0.75% -0.60% -4.26% 5.24% 0.43% N/A -5.68%
After Tax Held -2.21% -2.16% -6.23% 3.33% -1.43% N/A -7.39%
After Tax Sold -0.42% -0.34% -2.41% 3.20% -0.46% N/A -4.64%
Market Price -0.17% 0.22% -4.15% 5.46% 0.51% N/A -5.63%
Index Performance **
STOXX® Europe Select Dividend 30 Index -1.27% -1.18% -4.34% 5.57% 0.68% -2.17% -5.27%
MSCI Europe Index -2.69% -5.13% -11.22% 1.96% 1.02% 1.52% -0.96%
STOXX® Europe 600 Index -3.24% -5.76% -11.20% 2.40% 1.38% 1.82% -0.67%
Quarter End Performance (as of 6/30/2016)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) -0.75% -0.60% -4.26% 5.24% 0.43% N/A -5.68%
After Tax Held -2.21% -2.16% -6.23% 3.33% -1.43% N/A -7.39%
After Tax Sold -0.42% -0.34% -2.41% 3.20% -0.46% N/A -4.64%
Market Price -0.17% 0.22% -4.15% 5.46% 0.51% N/A -5.63%
Index Performance **
STOXX® Europe Select Dividend 30 Index -1.27% -1.18% -4.34% 5.57% 0.68% -2.17% -5.27%
MSCI Europe Index -2.69% -5.13% -11.22% 1.96% 1.02% 1.52% -0.96%
STOXX® Europe 600 Index -3.24% -5.76% -11.20% 2.40% 1.38% 1.82% -0.67%
3-Year Statistics (as of 6/30/2016)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FDD 12.85% 3.00 0.85 0.43 0.95
MSCI Europe Index 14.33% -0.43 1.00 0.18 1.00
STOXX® Europe 600 Index 14.35% --- 1.00 0.21 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.
Indexes do 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 0.60%. Expenses are capped contractually at 0.60% per year, at least until January 31, 2017.

MSCI Europe Index - The 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.

STOXX® Europe 600 Index - The 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 outstanding shares .
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
The Morningstar RatingTM is provided for those exchange-traded funds ("ETFs") with at least a three-year history. Ratings are based on the ETF's Morningstar Risk-Adjusted Return measure which accounts for variation in monthly performance, placing more emphasis on downward variations and rewarding consistent performance. An ETF's risk-adjusted return includes a brokerage commission estimate. This estimate is intended to reflect what an average investor would pay when buying or selling an ETF. PLEASE NOTE, this estimate is subject to change and the actual brokerage commission an investor pays may be higher or lower than this estimate. Morningstar compares each ETF's risk-adjusted return to the open-end mutual fund rating breakpoints for that category. Consistent with the open-end mutual fund ratings, the top 10% of ETFs in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The overall rating for an ETF is based on a weighted average of the time-period ratings (e.g., the ETF's 3,5, and 10 year rating). The determination of an ETF's rating does not affect the retail open end mutual fund data published by Morningstar. Past performance is no guarantee of future results.
4 Most recent distribution paid or declared to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
5 The 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 and includes the effects of fee waivers and expense reimbursements, if applicable.
6 The unsubsidized 30-day SEC yield is calculated the same as the 30-day SEC yield, however it excludes contractual fee waivers and expense reimbursements.
7 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.
8 Index yield represents the weighted average trailing 12-month dividend of the constituents of the STOXX® Europe Select Dividend 30 Index.
9 All market capitalization numbers are in USD$ Millions.
10 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.

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. There can be no assurance that the fund's investment objective will be achieved.

The fund may invest in securities issued by companies concentrated in a particular industry or country. 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 securities of non-U.S. issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers. The fund may invest in depositary receipts which may be less liquid than the underlying shares in their primary trading market.

The fund is subject to greater risks of adverse events which occur in the European region and may experience greater volatility than a fund that is more broadly diversified geographically. A significant number of countries in Europe are member states in the European Union, and the member states no longer control their own monetary policies. In these member states, the authority to direct monetary policies, including money supply and official interest rates for the Euro, is exercised by the European Central Bank. Furthermore, the European sovereign debt crisis has had, and continues to have, a significant negative impact on the economies of certain European countries and their future economic outlooks.

The fund is classified as "non-diversified" and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.

First Trust Advisors L.P. is the adviser to the fund. First Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P., the fund's distributor.

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.

©2016 Morningstar, Inc. All Rights Reserved. The Morningstar RatingTM information contained herein: (1) is proprietary to Morningstar;(2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
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