MDIV: Income ETF With Slow Decay, Lagging Competitors

(6min)

Summary

  • First Trust Multi-Asset Diversified Income Index Fund has a 6.6% yield from stocks, REITs, preferreds, MLPs and junk bonds.
  • MDIV is well-balanced in these five sectors and diversified across a number of issuers.
  • MDIV positive total return hides a slow decay in capital and income stream for shareholders, amplified by inflation.
  • Additionally, MDIV has underperformed several multi-asset income ETFs over the last 7 years.
  • Quantitative Risk & Value members get exclusive access to our real-world portfolio. See all our investments here »

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SomeMeans

This article updates my review of MDIV published in June 2023, in light of current holdings and recent performance.

Strategy

First Trust Multi-Asset Diversified Income Index Fund (NASDAQ:MDIV) was launched on 08/13/2012 and tracks the Nasdaq US

Many high-yield ETFs and closed-end funds suffer from capital and distribution decay. However, decay can be avoided or mitigated by rotational strategies, instead of using funds as long-term investments. I designed a 5-factor ranking system in 2016 and monitored its performance during several years, before sharing the eight best ranked CEFs with my Investing Group members. Get started with a two-week free trial now.

This article was written by

16.04K Followers

Fred Piard, PhD. is a quantitative analyst and IT professional with over 30 years of experience working in technology. He is the author of three books and has been investing in data-driven systematic strategies since 2010.

Fred runs the investing group Quantitative Risk & Value where he shares a portfolio invested in quality dividend stocks, and companies at the forefront of tech innovation. Fred also supplies market risk indicators, a real estate strategy, a bond strategy, and an income strategy in closed-end funds. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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