First Trust STOXX European Select Dividend Income Fund

FDD

Market cap $671M

Maximilian Uleer, Deutsche Bank head of European equity and cross asset strategy, joins CNBC's 'Money Movers' to discuss outlooks on European markets.

European stocks are expected to open lower on Tuesday, reversing largely positive sentiment at the start of the week.

European stocks are expected to open mostly higher Monday as markets keep a close eye on a new trade dispute between the U.S. and China.

European stocks are expected to hover around the flatline at the open on Wednesday as markets lack direction during a difficult week.

European stocks are expected to open mixed on Tuesday with all eyes on France after the resignation of Prime Minister Sebastien Lecornu.

Launched on 08/27/2007, the First Trust STOXX European Select Dividend ETF (FDD) is a smart beta exchange traded fund offering broad exposure to the European Equity ETFs category of the market.

European equities have seen double-digit gains YTD, buoyed by improved sentiment and investor outflows from U.S. markets. FDD and FEZ are two European equity index ETFs benefitting from these trends. FDD is more of an income play, with a 5.1% yield, FEZ a more traditional equity index fund, with greater diversification, lower risk and volatility.

FDD offers strong momentum, high yield, and European Financials exposure, but growth-adjusted valuation is less attractive with a PEG ratio above 2x. Recent technicals show bearish RSI divergence and possible short-term weakness, despite a strong long-term trend and solid support near $15. Liquidity and risk profile are reasonable, but September-October seasonality and heavy Financials weighting warrant caution for new entries.

Economists polled by Reuters had expected the rate to remain unchanged from July, at 2%.

For investors looking for income through a multi-asset class approach, it might seem sensible to max out the dividend yield within the equity allocation. Yield-focused equity strategies may introduce regional and sector concentrations that can influence returns. Given the relatively attractive yields available in other asset classes, we think it makes more sense to design 'core-like' equity exposure within multi-asset income solutions.