FDD Profile
The First Trust STOXX European Select Dividend Index Fund is designed to provide investors with targeted exposure to high dividend-yielding stocks within Europe. The fund primarily invests at least 90% of its net assets, including any investment borrowings, in the common stocks and depositary receipts that comprise the STOXX Europe Select Dividend 30 Index. This index is meticulously crafted to highlight 30 leading European companies that offer attractive dividend yields.
The index selects its constituent securities from the broader STOXX Europe 600 Index, focusing on companies with a strong track record of paying dividends. To qualify, a company must demonstrate a non-negative five-year dividend-per-share growth rate and maintain a dividend-to-earnings ratio of 60% or less. These criteria are designed to ensure that selected securities not only provide substantial income but also reflect sustainable dividend policies, enhancing the overall stability of returns.
The funds strategy emphasizes high dividend yield as a key investment criterion, making it an attractive option for income-focused investors seeking exposure to established European companies. By concentrating on high dividend payers, the fund aims to deliver a steady income stream while also benefiting from the potential for capital appreciation. The selection process involves rigorous screening to ensure that only companies with robust and reliable dividend distributions are included in the portfolio.
The First Trust STOXX European Select Dividend Index Funds approach to dividend investing allows investors to tap into the income potential of some of Europe's most prominent companies. However, the fund's focus on high dividend yields may lead to a concentration in specific sectors known for strong dividend performance. This targeted approach provides investors with the opportunity to benefit from dividend income while potentially gaining from the overall performance of top European stocks.
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