FDL Profile
The First Trust Morningstar Dividend Leaders Index Fund aims to provide investors with exposure to high-yielding dividend stocks with a strong track record of consistent payments. Under normal market conditions, the fund invests at least 90% of its net assets, including any investment borrowings, in common stocks that are part of its benchmark index. This strategy ensures that the fund remains closely aligned with the performance of the index.
The underlying index is specifically designed to track the performance of the top 100 dividend-paying stocks that exhibit a history of reliable dividend payments. These companies are selected based on their ability to deliver consistent and sustainable dividends over time. The focus on dividend sustainability makes this fund particularly appealing to income-focused investors who seek stable returns from their investments.
To be included in the index, a stock must not only offer high dividend yields but also demonstrate a commitment to maintaining and potentially increasing its dividend payouts. The index evaluates companies based on various criteria, including dividend yield, payout consistency, and financial stability. This rigorous selection process helps ensure that the fund's investments are in firms with a strong capacity to continue providing attractive dividend income.
As a non-diversified fund, the First Trust Morningstar Dividend Leaders Index Fund concentrates its investments in a specific segment of the equity marketâ€high dividend-paying stocks. This focus allows the fund to target companies with a proven ability to generate income for investors, while potentially increasing exposure to sector-specific risks and opportunities associated with dividend-paying equities.
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