First Trust International Multi-Asset Income ETF (YDIV) Hits The Street

by on August 28, 2013 | ETFs Mentioned:

Stocks are off to a shaky start this week as uncertainty over the looming Fed taper continues to take its toll on investors’ confidence. Adding to the clouds of uncertainty are mixed data releases; durable goods orders plunged a worrisome 7.3% in July while consumer confidence improved from last month’s reading, sending investors mixed signals about what the Fed’s next move might be.

Amid the tug of war between the bulls and the bears, First Trust added the International Multi-Asset Diversified Income Index Fund (YDIV) to its lineup of dividend-focused strategies; the new ETF began trading on the NASDAQ on Friday, August 23rd, 2013 [see 101 High Yielding ETFs For Every Dividend Investor].

YDIV: The International Complement To MDIV

The new ETF is the international version of First Trust’s recently launched Multi-Asset Diversified Income Index Fund (MDIV). YDIV is linked to the NASDAQ International Multi-Asset Diversified Income Index , which is designed to offer exposure to a basket of non-U.S. income-producing securities, including equities, REITs, preferred stocks, utilities and ETFs, as well as fixed-income instruments [see Monthly Dividend ETFdb Portfolio].

At the time of launch, YDIV had a total of 123 holdings with a tilt towards the iShares JPMorgan USD Emerging Markets Bond ETF (EMB, A-).

Meet the Competition

YDIV joins the growing Diversified Portfolio ETFdb Category, which is comprised of over 20 funds with an average expense ratio of 0.85%; by comparison, the new First Trust ETF falls on the cheaper end of the cost-spectrum as it charges 0.79% in annual expense fees. Despite its competitive price tag, YDIV will still face very stiff competition from more established funds in the space, including:

  • First Trust Multi-Asset Diversified Income Index Fund (MDIV, A+) with over $490 million in assets under management
  • iShares S&P Growth Allocation Fund (AOR, B+) with over $200 million in AUM
  • iShares S&P Moderate Allocation Fund (AOM, A) with over $185 million in AUM
  • iShares S&P Aggressive Allocation Fund (AOA, B+) with over $172 million in AUM
  • iShares S&P Conservative Allocation Fund (AOK, A-) with nearly $135 million in AUM
  • State Street SPDR Income Allocation ETF (INKM, A) with over $107 million in AUM
  • iShares Multi-Asset Income ETF (IYLD, B+with over $105 million in AUM

YDIV warrants a closer look under the hood for those looking to beef up their portfolio’s current-income while also diversifying geographically outside the United States.

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Disclosure: No positions at time of writing.