First Trust, the eleventh-largest U.S. ETF sponsor, will revamp the First Trust Strategic Value Index Fund (NYSE:FDV) in an effort to make the fund a better complement to the firm's existing lineup.
Around June 3, the ETF will change its name to First Trust Capital Strength and will begin trading on the Nasdaq under the ticker "FTCS." The ETF currently tracks the Credit Suisse U.S. Value Index, but will shift to the Capital Strength Index, an equal-dollar weighted index. That index seeks to provide exposure to well-capitalized companies with strong market positions, screened for strong balance sheets, high degree of liquidity, ability to generate earnings growth and show financial strength and profit growth, according to ETF Trends.
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The First Trust Strategic Value Index Fund's current index selects possible constituents based on a discount cash flow model and the ETF is currently an equal-weight product.
FDV, which is nearly seven years old, is home to 50 stocks. Top-10 holdings include Dow components Hewlett-Packard (NYSE:HPQ), J.P. Morgan Chase (NYSE:JPM) and Cisco Systems (NASDAQ:CSCO). Technology, energy and financial services are the ETF's three largest sector weights, combing for over 72 percent of FDV's weight.
First Trust believes the index change will help increase performance potential for investors will lowering costs, ETF Trends reported. FDV currently charges an annual expense ratio of 0.65 percent per year.
The Credit Suisse U.S. Value Index returned 11.85 percent this year through the end of March and 12.92 percent over the past year, numbers that trail the S&P 500 Value Index, according to First Trust data. FDVcurrently has $64.5 million in assets under management.
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