Crumly Loads Up on 110,675 SDVY Shares in Q2 Filing

What happened

Crumly & Associates Inc. disclosed in a recent SEC filing that it purchased 110,675 additional shares of First Trust Exchange-Traded Fund VI - First Trust SMID Cap Rising Dividend Achievers ETF(SDVY -0.93%) during Q2 2025. The transaction increased its total position to 387,258 shares with a market value of $13.66 million.

What else to know

This buy activity brought SDVY to 3.33% of the firm's assets under management (AUM).

Top holdings after the latest 13F filing are:

JGRO (JGRO -0.44%): $28.93 million (7.0% of AUM)

RDVY (RDVY -0.75%): $21.96 million (5.3% of AUM)

DSTL (DSTL -0.90%): $19.95 million (4.9% of AUM)

JPST (JPST 0.04%): $18.05 million (4.4% of AUM)

HEFA (HEFA -0.56%): $16.22 million (3.9% of AUM)

SDVY closed at $36.17 yesterday, up 10.4% year-over-year, but underperformed the S&P 500 by 3.7 percentage points.

The ETF trades 11.2% below its 52-week high; its price is 6.4% above the 50-day and 3.2% above the 200-day moving averages as of June 30.

ETF overview

First Trust offers an exchange-traded fund (ETF) that invests in a diversified portfolio of 184 small and mid-cap U.S. companies with a consistent track record of rising dividends.

The ETF operates by tracking an index focused on dividend growth, allocating at least 90% of assets to qualifying common stocks to provide exposure to dividend achievers.

First Trust SMID Cap Rising Dividend Achievers ETF provides investors with access to a curated basket of small and mid-cap U.S. companies that have demonstrated the ability to consistently increase dividends.

Foolish take

Small- and mid-cap stocks have the potential to turbocharge your portfolio, as their underlying businesses are usually fast growers. If they additionally pay out dividends, then that’s usually a healthy sign of sustainable growth.

Over the past three and five years, the First Trust SMID Cap Rising Dividend Achievers ETF has impressive total annual returns of 16.48% and 18.27%, respectively. However, more recent performances haven’t been so attractive. Over the last 12 months, total return stood at 12.35% while year-to-date returns have further dwindled to 1.97%.

So, is this the right time to invest in this ETF? I’m not so sure.

Small and mid-cap stocks do come with risks. In an interest rate environment that’s still considered high relative to the past decade, borrowing costs have hindered growth for small and mid-cap stocks. According to an analysis by brokerage firm Charles Schwab, small caps have a larger share of debt recycling coming up over the next four years, versus large-cap companies. That means, unless inflation cools and interest rates drop, small caps will potentially face higher borrowing costs, further hobbling growth.

At this point, I’ll be more comfortable in ETFs with large cap names in them, such as the Vanguard S&P 500 ETF. However, if you believe small and mid-cap companies will see a turnaround over the longer term, and if you can stomach some risk over the next few months, the First Trust SMID Cap Rising Dividend Achievers ETF could be a good bet. This ETF, with a dividend yield of 1.81%, only has dividend payers in its portfolio, and could be a good option for income seeking investors as well.

Glossary

13F: A quarterly SEC filing required from institutional investment managers to disclose their equity holdings.
AUM (Assets Under Management): The total market value of investments managed on behalf of clients by a fund or firm.
ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a basket of assets like stocks or bonds.
SMID Cap: Refers to small- and mid-capitalization companies, typically with market values between $300 million and $10 billion.
Dividend Achievers: Companies with a consistent record of increasing their dividend payouts over time.
SEC Filing: Official documents submitted to the U.S. Securities and Exchange Commission to disclose financial and operational information.
Moving Average: A statistical calculation showing the average price of a security over a specific period, smoothing out short-term fluctuations.
Index Tracking: An investment strategy where a fund aims to replicate the performance of a specific market index.
Trade Value: The total dollar amount of a transaction, calculated as the number of shares times the price per share.
Reportable: Refers to holdings or transactions that must be disclosed to regulators, such as those included in 13F filings.
Stake: The amount of ownership or shares held in a particular company or fund.
Curated Basket: A carefully selected group of securities assembled to meet specific investment criteria or objectives.