RFDA: ALPS DYNAMIC US DIVIDEND ADVANTAGE ETF
ETF Education Report: ALPS DYNAMIC US DIVIDEND ADVANTAGE ETF (RFDA)
What this ETF is trying to do
The ALPS DYNAMIC US DIVIDEND ADVANTAGE ETF (ticker: RFDA) is an exchange-traded fund listed on the NYSE. While the specific strategy isn't detailed in the data, the name and holdings suggest it focuses on U.S. companies that pay dividends. It holds a total of 78 different investments.
What the numbers show
When looking at an ETF, it is important to understand two different types of returns: price return and total return.
• Price Return: This measures only the change in the share price.
• Total Return: This includes both the share price changes and any cash distributions (dividends) paid out.
For RFDA, the numbers show growth in both areas:
• Year-to-Date (YTD): The price return is approximately 13.42%, while the total return is approximately 15.34%.
• One Year: The price return was approximately 15.65%, and the total return was approximately 18.12%.
• Three Years: The price return was approximately 64.11%, and the total return was approximately 75.96%.
To visualize the price change, we can look at an estimated price from roughly one year ago, which was $62.53. The current price is $72.31.
Income and distribution explanation
Some investors look for ETFs that pay regular cash. This is called the distribution yield. For RFDA, the distribution yield is approximately 1.96%. This ETF usually pays out money monthly, having made 12 payments over the last year. It is important to remember that a distribution yield tells you how much cash was paid out relative to the price, but it is not the same thing as your total return.
NAV erosion explanation
"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases significantly over time. Some investors worry that high payouts might cause this. However, for RFDA, the erosion-risk score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this ETF.
Top Holdings
The following are the top holdings in the portfolio (note that this list is partial):
• NVIDIA CORP: 3.22%
• JOHNSON & JOHNSON: 3.18%
• JPMORGAN CHASE & CO: 3.08%
• UNITEDHEALTH GROUP INC: 2.80%
• CITIGROUP INC: 2.56%
• MICROSOFT CORP: 2.56%
• CONOCOPHILLIPS: 2.49%
• PHILLIPS 66: 2.37%
• MERCK & CO INC: 2.28%
• BRISTOL-MYERS SQUIBB CO: 2.03%
Pros
• The ETF has shown positive price returns and total returns over the one-year and three-year periods.
• It provides regular monthly distributions.
Cons
• The distribution yield is relatively low compared to some high-income funds.
Beginner takeaway
RFDA shows both price growth and total growth, meaning the share price went up and it also paid out dividends. Always remember to distinguish between price return (the stock price moving) and total return (price movement plus dividends).
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | STATE STREET INSTL TRS PLS MMKT PREMIER | TPIXX | 5.30% |
| 2 | NVIDIA CORP | NVDA | 3.56% |
| 3 | JOHNSON & JOHNSON | JNJ | 3.17% |
| 4 | JPMORGAN CHASE & CO | JPM | 2.92% |
| 5 | UNITEDHEALTH GROUP INC | UNH | 2.78% |
| 6 | MICROSOFT CORP | MSFT | 2.74% |
| 7 | PHILLIPS 66 | PSX | 2.69% |
| 8 | CITIGROUP INC | C | 2.54% |
| 9 | COCA-COLA CO | KO | 2.52% |
| 10 | CONOCOPHILLIPS | COP | 2.50% |