Richmond Investment Services Trims $6 Million from First Trust SMID Cap Rising Dividend Achievers ETF (SDVY) Position

Richmond Investment Services, LLC disclosed a significant reduction in its holding of First Trust SMID Cap Rising Dividend Achievers ETF (NASDAQ:SDVY), trimming the position by $6.31 million, per its Nov. 12, 2025, SEC filing.

What happened

According to a Nov. 12, 2025, SEC filing, Richmond Investment Services, LLC sold 206,264 shares of First Trust SMID Cap Rising Dividend Achievers ETF, reducing its stake to 354,450 shares valued at $13.5 million as of Sept. 30, 2025.

The trade lowered the position’s share of fund AUM to 2.5% from 4.2% in the prior quarter.

What else to know

Following the sale, SDVY becomes Richmond's tenth-largest holding.

The firm's top five holdings after the filing:

• iShares Russell Top 200 ETF (NYSEMKT:IWL): $64 million (11.9% of AUM)
• State Street SPDR Portfolio S&P 500 ETF (NYSEMKT:SPYM): $39 million (7.3% of AUM)
• VanEck Morningstar Wide Moat ETF (NYSEMKT:MOAT): $33 million (6.1% of AUM)
• Invesco QQQ Trust (NASDAQ:QQQ): $30 million (5.5% of AUM)
• Vanus Henderson Short Term Duration Income ETF (NYSEMKT:VNLA): $21 million (3.8% of AUM)

As of Dec. 9, 2025, shares were priced at $38.41, down 1% over one year, underperforming the S&P 500 by 14 percentage points.

The fund is currently 1% below its 52-week high.

ETF overview

ETF snapshot

First Trust SMID Cap Rising Dividend Achievers ETF (SDVY):

• Tracks an index of 100 small- and mid-cap (SMID) U.S. companies with consistent and rising dividends, aiming to deliver long-term capital appreciation and income.
• Holds equities of firms selected for their history and potential for dividend growth, with at least 90% of assets invested in index constituents.

The First Trust SMID Cap Rising Dividend Achievers ETF (SDVY) offers investors targeted exposure to small- and mid-cap U.S. equities that demonstrate a robust track record of dividend increases.

The fund's rules-based approach and focus on dividend growth companies aim to balance income generation with potential for capital appreciation.

SDVY's diversified holdings and disciplined selection criteria position it as a strategic investment tool for investors seeking quality and growth within the SMID-cap segment.

Foolish take

After adding to the SDVY ETF over the last three quarters, Richmond took a quick profit in the third quarter as the ETF extended its 10% rise over just the previous six months.

I don't think investors should interpret Richmond's sale as anything to worry about. Instead, it appears they were rebalancing their portfolio slightly, capitalizing on the ETF's recent rise.

Since its debut on the public markets in 2017, SDVY has lagged the S&P 500's total returns by a score of 121% to 203%. However, it is worth remembering that much of this outperformance comes from the latter's massive allocation to the Magnificent Seven, which have been on an incredible run.

Whereas the S&P 500 trades at roughly 29 times earnings, SDVY's P/E ratio is only 16, making it a more attractive investment from a value perspective. Furthermore, its dividend yield is slightly higher, which could become a significant driver of long-term returns, considering that the ETF focuses on dividend-growth stocks.

That said, the ETF's expense ratio of 0.59% is somewhat lofty -- especially compared to standard tracking indexes.

I personally would rather handpick my SMID dividend growth stocks. Still, the SDVY ETF would be a solid choice for investors seeking a one-holding solution with broader diversification to this area of the market, such as Richmond.

Glossary

13F reportable AUM: Assets under management that must be disclosed in quarterly SEC Form 13F filings by institutional investment managers.
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 diversified portfolio of assets like stocks or bonds.
Dividend yield: Annual dividends paid by a fund or stock divided by its current price, expressed as a percentage.
Capital appreciation: The increase in value of an investment or asset over time.
Dividend growth: The consistent increase in dividend payments by a company or fund over time.
Index constituents: The individual securities that make up a specific market index tracked by a fund.
Rules-based approach: An investment strategy that follows predefined, systematic criteria for selecting and managing assets.
SMID cap: Refers to small- and mid-capitalization companies, typically with market values between $300 million and $10 billion.
52-week high: The highest price at which a security has traded during the past year.
Top holdings: The largest investments or positions within a fund's portfolio, usually by market value.

Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.