F/m High Yield 100 ETF (ZTOP) seeks to track the 100 highest dividend-yielding stocks from a broad equity universe, focusing on companies that distribute substantial cash returns to shareholders. This income-focused equity ETF targets dividend yield maximization rather than total return or growth.
How It Works
ZTOP employs a rules-based methodology that screens and ranks stocks by dividend yield, selecting the top 100 highest-yielding securities for inclusion. Holdings are weighted by dividend yield rather than market capitalization, meaning companies with higher yields receive larger allocations. The fund rebalances quarterly to capture changing dividend landscapes and maintain its high-yield focus. Portfolio concentration in dividend-heavy sectors like utilities, REITs, and energy is typical given the yield-first selection criteria.
Key Features
- Zero expense ratio provides cost-free access to high-yield equity income, eliminating annual fees that typically reduce dividend returns
- Yield-weighted methodology concentrates holdings in highest-paying dividend stocks, potentially delivering above-market income generation
- Quarterly rebalancing captures evolving dividend policies and maintains focus on current highest-yielding opportunities in the market
Risks
- This ETF can lose significant value when dividend-paying sectors decline, as yield-focused stocks often underperform during growth market phases by 15-20%
- Dividend cuts by major holdings directly reduce both income and share price, creating dual negative impact on total returns
- High concentration in dividend-heavy sectors like utilities and energy creates sector risk during commodity price swings or interest rate changes
Who Should Own This
Best suited for income-focused investors with 3-5 year time horizons seeking current dividend income over capital appreciation. Medium risk tolerance required due to sector concentration and dividend cut risks. Works as satellite holding (10-25% of equity allocation) for retirees or income-oriented portfolios complementing growth-focused core holdings.