KNGZ: FIRST TRUST S&P 500 DIVERSIFIED DIVIDEND ARISTOCRATS ETF
Understanding the FIRST TRUST S&P 500 DIVERSIFIED DIVIDEND ARISTOCRATS ETF (KNGZ)
The FIRST TRUST S&P 500 DIVERSIFIED DIVIDEND ARISTOCRATS ETF (KNGZ) is an exchange-traded fund designed to provide exposure to a specific group of companies. Based on its name and holdings, it focuses on dividend-paying stocks within the S&P 500.
What this ETF is trying to do
This ETF invests in a variety of companies. According to the provided Top Holdings, the fund includes businesses such as Accenture PLC (4.63%), HP Inc (4.37%), IBM Corp (4.35%), and Verizon Communications Inc (3.55%). These holdings represent a mix of different industries, including technology and communications. Please note that the list provided is partial and does not include all 100 holdings in the fund. Holdings can change over time.
What the numbers show
When looking at how this ETF has performed, it is important to distinguish between price return and total return. Price return only tracks the change in the share price, while total return includes both the share price changes and the dividends paid out.
• Year-to-Date (YTD): The price return is approximately 15.01%, while the total return is approximately 17.14%.
• One-Year: The price return was approximately 14.56%, and the total return was approximately 17.77%.
• Three-Year: The price return was approximately 52.77%, and the total return was approximately 65.87%.
• Five-Year: The five-year total return is approximately 63.71%.
To give you an idea of the price movement, the current price is $41.19. The estimated price from roughly one year ago was approximately $35.95.
Income and distribution explanation
KNGZ provides cash distributions to investors. The distribution yield is approximately 2.58%. This number describes the cash paid out relative to the ETF's price.
The fund usually pays distributions on a quarterly basis, with four payouts recorded over the last 12 months. Most of these payments have historically occurred on Thursdays. It is important to remember that a distribution yield is not the same as total return; total return provides a more complete picture of how much value an investor gained.
NAV erosion explanation
"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.
However, regarding price-based evidence, the fund has an erosion score of 100, which is labeled as "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.
Pros
• Positive Returns: The fund has shown positive price returns and total returns across one-year, three-year, and five-year periods.
• Income Generation: The fund offers a regular distribution yield.
Cons
• Partial Data: The provided list of holdings is only a partial view of the full portfolio.
• Market Risk: Like all ETFs, the share price can change based on market conditions.
Beginner takeaway
KNGZ is an ETF that focuses on dividend-paying companies. For those looking at the numbers, the total return is higher than the price return, which shows that dividends have added to the overall value. While it provides regular quarterly income, investors should always look at both the distribution yield and the total return to understand how a fund is performing.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | ACCENTURE PLC CLASS A | ACN | 4.63% |
| 2 | HP INC | HPQ | 4.37% |
| 3 | INTERNATIONAL BUSINESS MACHINES CORP | IBM | 4.35% |
| 4 | VERIZON COMMUNICATIONS INC | VZ | 3.55% |
| 5 | MICROCHIP TECHNOLOGY INC | MCHP | 3.53% |
| 6 | QUALCOMM INC | QCOM | 3.43% |
| 7 | TEXAS INSTRUMENTS INC | TXN | 3.38% |
| 8 | TE CONNECTIVITY PLC REGISTERED SHARES | TEL | 2.91% |
| 9 | COMCAST CORP CLASS A | CMCSA | 2.86% |
| 10 | ORACLE CORP | ORCL | 2.67% |