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By The ETF Professor

The First Trust Value Line Dividend Index Fund (FVD) recently celebrated its 10th birthday.

More important than FVD's age is that the ETF has delivered a 10-year annualized return of 9.2 percent compared with 7.4 percent for the S&P 500 (SPY), according to Morningstar.

While FVD does not grab the same amount of press as the largest dividend ETFs, investors have embraced the First Trust offering by pouring $725.2 million into the fund. FVD has also achieved a 5-Star Overall Morningstar Rating as of 8/30/13, among 1028 funds in the Large Value category based on the ETF's Morningstar Risk-Adjusted Return, according to a statement.

FVD has impressed over the past three years as well. Investors who owned the ETF and reinvested the dividends earned returns of 56.1 percent since September 15, 2010. Now that the Federal Reserve has confirmed it will not be tapering its $85 billion-per-month bond-buying program, FVD could be poised for more upside.

Over the past three months, the ETF gained 1.5 percent, including reinvested dividends, but rising interest rates weighed on the ETF a bit. FVD, which charges 0.7 percent per year, is heavily allocated to the rate-sensitive utilities sector and consumer staples stocks. Those sectors are not only richly valued, but have also proven vulnerable to the recent spike in interest rates.

With tapering off the table, income investors are free to embrace some of their favorite sectors again. With about 42 percent of FVD's combined weight allocated to utilities and staples, the fund is positioned to benefit in a no tapering world.

"While the field has become more crowded over the past few years, FVD has distinguished itself for over a decade as an effective tool for investors seeking below-average volatility with above-average dividends," said Ryan Issakainen, Senior Vice President and ETF Strategist at First Trust, in the statement.

FVD's selection process begins with only those stocks that earn Value Line safety ratings of one or two. From there, the universe of eligible securities is parsed down to "those companies with a higher than average dividend yield, as compared to the indicated dividend yield of the Standard & Poor's 500 Composite Stock Price Index," according to First Trust.

FVD is equal-weighted and does offer decent exposure to new sources of dividend growth. FVD devotes over 21 percent of its combined weight to the financial services and technology sectors, two of the leading sources of S&P 500 dividend growth over the past several years.

Disclaimer: Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Source: Dividend ETF Beats S&P 500 For A Decade