SMDV ETF

SMDV oversees a portfolio of 100 SMID stocks that have at least 10 years of dividend growth in the books. The methodology has nuances, though. Regional bank stocks boosted SMDV's returns in July, allowing it to outperform the S&P 500 index marginally since the previous analysis. However, fundamentally, nothing has changed about this vehicle. Its quality characteristics remain pronouncedly weak, while growth is soft.

Designed to provide broad exposure to the Style Box - Small Cap Value category of the market, the ProShares Russell 2000 Dividend Growers ETF (SMDV) is a smart beta exchange traded fund launched on 02/03/2015.

SMDV might attract DGI investors for its 2.91% expected yield and double-digit dividend growth rate. However, the way it accomplishes that is not optimal. The selection process begins by identifying small-cap stocks with at least ten consecutive years of dividend growth. It sounds good, but 40% of eligible stocks are Regional Banks. SMDV's selections in this sub-industry, which total 25%, have delivered negative total returns over the last five years and have negative estimated earnings growth.

A smart beta exchange traded fund, the ProShares Russell 2000 Dividend Growers ETF (SMDV) debuted on 02/03/2015, and offers broad exposure to the Style Box - Small Cap Value category of the market.

Launched on 02/03/2015, the ProShares Russell 2000 Dividend Growers ETF (SMDV) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Value category of the market.

SMDV is a passively managed investment vehicle focused on small/mid-cap dividend growers. SMDV has underperformed since my previous coverage, with utilities being among the key detractors. I maintain the conservative Hold rating. I like its value factor exposure, yet both quality and growth are fairly lackluster. In the current environment, this is hardly a winning combination.

Launched on 02/03/2015, the ProShares Russell 2000 Dividend Growers ETF (SMDV) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Value category of the market.

ProShares Russell 2000 Dividend Growers ETF focuses on small-cap companies with consistent dividend growth. Top holdings include Cambridge Bancorp, HNI Corp., Kadant Inc., Horace Mann Educators Corp., and SpartanNash Co. SMDV is heavily weighted towards the financial sector, which may pose a risk, and small-cap stocks can be more volatile.

ProShares Russell 2000 Dividend Growers ETF implements an equal-weight methodology and a dividend growth strategy in small caps. SMDV looks attractive regarding long-term volatility, dividend growth and quality metrics, but there's an issue: it is overweight in regional banks. Investors looking for the safety of dividend-growth and equal-weight investing styles should probably look elsewhere.