Making its debut on 03/29/2011, smart beta exchange traded fund iShares Core High Dividend ETF (HDV) provides investors broad exposure to the Style Box - Large Cap Value category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

The fund is managed by Blackrock, and has been able to amass over $10.94 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. HDV, before fees and expenses, seeks to match the performance of the Morningstar Dividend Yield Focus Index.

The Morningstar Dividend Yield Focus Index offers exposure to high quality U.S. domiciled companies that have had strong financial health and an ability to sustain above average dividend payouts.

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.

It's 12-month trailing dividend yield comes in at 3.55%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

For HDV, it has heaviest allocation in the Consumer Staples sector --about 22.30% of the portfolio --while Energy and Healthcare round out the top three.

Looking at individual holdings, Exxon Mobil Corp (XOM) accounts for about 7.76% of total assets, followed by Johnson & Johnson (JNJ) and Progressive Corp (PGR).