Description

The fund tries to generate a greater dividend yield by building its portfolio on the basis of historical yield performance and the ability to sustain dividend payments. Its rule set requires a company's current dividend to be higher than it was five years ago, and less than its forward EPS estimates. Eligible securities are ranked by dividend yield, and the top 100 securities are selected for index inclusion. Its weighting scheme is also dividend dollar-weighted. Adjustments occur so that each security has a maximum weight of 10%, and those securities weighing more than 5% do not collectively exceed 50% of the entire portfolio. This approach causes FDL to diverge from its base index. The index undergoes quarterly rebalance and annual reconstitution.