SHRY

First Trust Exchange-Traded Fund VI First Trust Bloomberg Shareholder Yield ETF

First Trust Exchange-Traded Fund VI First Trust Bloomberg Shareholder Yield ETF (SHRY) seeks to track the Bloomberg Shareholder Yield Index, which measures U.S. companies that return the most cash to shareholders through dividends and share buybacks. This income-focused equity ETF targets firms with the highest combined dividend yields and share repurchase rates.

How It Works

SHRY uses a rules-based methodology that screens the 1,000 largest U.S. companies by market capitalization, then ranks them by total shareholder yield (dividend yield plus net share buyback yield). The fund selects the top 50 companies with the highest combined yields and weights them equally. Holdings are rebalanced quarterly to maintain equal weighting and capture changes in shareholder return policies. This active screening approach focuses on companies actively returning capital rather than simply high dividend payers.

Key Features

Combines dividend income with share buyback exposure, capturing total shareholder returns rather than dividends alone
Equal-weighting methodology prevents over-concentration in any single high-yielding stock or sector
Quarterly rebalancing ensures portfolio maintains focus on companies with current high shareholder yield policies

Risks

This ETF can lose value if companies cut dividends or reduce buyback programs during economic stress, eliminating the fund's core value proposition
Equal weighting creates higher turnover costs and potential tax inefficiency compared to market-cap weighted alternatives
Value-oriented strategy may underperform growth stocks during bull markets, potentially lagging broader market indices for extended periods

Who Should Own This

Best suited as a satellite holding (10-20% of equity allocation) for income-focused investors with 3+ year time horizons seeking dividend income plus buyback exposure. Medium risk tolerance required due to value stock volatility. Ideal for investors wanting shareholder-friendly companies beyond traditional dividend-only strategies in taxable or retirement accounts.