First Trust Dorsey Wright Momentum & Value ETF (DVLU)

Overview

The First Trust Dorsey Wright Momentum & Value ETF (NASDAQ: MMV) is an actively managed exchange-traded fund that seeks to provide capital appreciation. It invests in U.S. exchange-listed equity securities of companies that have demonstrated strength in momentum and value characteristics, as determined by the Dorsey Wright & Associates, LLC research methodology. The ETF aims to capture the performance of companies exhibiting both upward price trends (momentum) and favorable valuation metrics (value).

Reputation and Reliability

First Trust is a well-established ETF provider with a broad range of products and a reputation for offering actively managed and index-based ETFs. They have a significant presence in the ETF market and are known for their innovative product development.

Management Expertise

The ETF is managed by First Trust Advisors L.P., utilizing the research and methodology developed by Dorsey Wright & Associates, LLC, an investment advisory firm with expertise in relative strength and momentum investing.

Goal

The primary investment goal of the First Trust Dorsey Wright Momentum & Value ETF is to achieve capital appreciation.

Investment Approach and Strategy

Strategy: The ETF aims to identify and invest in companies that exhibit strong characteristics of both momentum and value. This is not a passive index-tracking ETF; it is actively managed based on proprietary research.

Composition The ETF primarily holds a diversified portfolio of U.S. exchange-listed equity securities (stocks). The specific holdings are selected based on the Dorsey Wright relative strength and value methodology, meaning the composition will change as market conditions and company fundamentals evolve.

Market Share: Information on precise market share for specific actively managed ETFs within niche strategies like momentum and value is often proprietary and not readily available in public granular data. However, MMV operates within the broader US Equity ETF market.

Total Net Assets (AUM): 676340000

Key Competitors

• iShares MSCI USA Value Factor ETF (VLUE)
• Invesco S&P 500 Value ETF (SPMV)
• Schwab U.S. Value ETF (SCHV)

Competitive Landscape

The ETF industry is highly competitive, with numerous providers offering a wide array of strategies. MMV competes with other ETFs that focus on value, momentum, or a combination of both. Its active management strategy, based on Dorsey Wright's proprietary methodology, is a key differentiator. However, it faces competition from lower-cost passive ETFs and other actively managed funds with similar investment objectives. The advantage lies in its specialized approach, while a disadvantage might be its higher expense ratio compared to passive alternatives and the inherent risks of active management.

Historical Performance: To provide specific numerical historical performance data for graphical representation, a table would be necessary with dates and corresponding returns. However, based on general market trends and the ETF's strategy, its performance would be influenced by the outperformance of value and momentum stocks. Past performance is not indicative of future results.

Benchmark Comparison: MMV does not track a specific benchmark index. Its performance is assessed against its own investment objectives and potentially against broader equity indices (e.g., S&P 500) or category averages for actively managed large-cap growth or value funds.

Expense Ratio: 0.59

Average Trading Volume

The ETF's average trading volume indicates its liquidity, allowing investors to buy and sell shares with relative ease.

Bid-Ask Spread

The bid-ask spread represents the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept, influencing the cost of trading the ETF.

Market Environment Factors

The performance of MMV is influenced by broader economic indicators, interest rate policies, inflation, and investor sentiment towards growth versus value stocks. Sector rotation and the performance of companies within technology, healthcare, financials, and other sectors are also significant factors.

Growth Trajectory

The ETF's growth trajectory is tied to the success of its active management strategy in identifying and capitalizing on momentum and value trends. Changes in holdings and strategy are driven by the Dorsey Wright methodology's continuous assessment of market dynamics and company performance.

Competitive Edge

The ETF's primary competitive edge stems from the proprietary Dorsey Wright & Associates, LLC's research methodology, which focuses on relative strength and value factors. This specialized approach aims to systematically identify stocks that are expected to outperform. The active management allows for dynamic adjustments to holdings based on evolving market conditions, potentially capturing opportunities that passive strategies might miss. Its focus on a dual-factor approach (momentum and value) offers a distinct strategy compared to single-factor ETFs.

Volatility

The historical volatility of MMV is influenced by the underlying stocks it holds and the market's overall fluctuations. As an equity ETF, it is subject to market risk and the inherent volatility of stock prices.

Market Risk

Market risk for MMV includes risks associated with the overall stock market, economic downturns, geopolitical events, and changes in investor confidence. Specific sector risks and the performance of individual companies within the portfolio also contribute to market risk.

Ideal Investor Profile

The ideal investor for MMV is one seeking capital appreciation through an actively managed strategy that combines momentum and value investing principles. Investors should have a moderate to high risk tolerance and a long-term investment horizon, understanding that active management can lead to higher fees and potentially less predictability than passive investing.

Market Risk

This ETF is best suited for investors who believe in the efficacy of momentum and value investing strategies and are looking for an actively managed approach to capture potential outperformance. It is generally more suitable for long-term investors who can ride out short-term market fluctuations rather than active traders focused on very short-term price movements.

The First Trust Dorsey Wright Momentum & Value ETF (MMV) is an actively managed fund aiming for capital appreciation by investing in US equities exhibiting strong momentum and value characteristics. Managed using Dorsey Wright's proprietary research, it offers a distinct approach beyond passive index tracking. While it operates in a competitive ETF landscape, its specialized methodology provides a potential edge. Investors should be aware of its active management nature, potential for higher fees, and associated market risks, making it suitable for those with a long-term perspective and moderate to high risk tolerance.

Data Sources:

• First Trust website
• Financial data providers (e.g., Morningstar, Yahoo Finance)
• SEC Filings

Disclaimers:

This JSON output is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions. Data points like market share and bid-ask spreads are subject to change and may vary across different trading platforms.