First Trust Dorsey Wright Momentum & Value ETF (DVLU)

Overview

The First Trust Dorsey Wright Momentum & Value ETF (DVLU) seeks to provide investment results that correspond generally to the price and yield, before fees and expenses, of the Dorsey Wright Momentum Plus Value Index. The fund focuses on US companies with strong momentum characteristics and attractive valuations.

Reputation and Reliability

First Trust is a well-established ETF provider with a strong reputation and a long track record of offering innovative investment solutions.

Management Expertise

First Trust has a team of experienced investment professionals dedicated to managing and overseeing its ETF offerings.

Goal

The fund aims to track the performance of an index that identifies US companies exhibiting both strong momentum and attractive value characteristics.

Investment Approach and Strategy

Strategy: DVLU aims to replicate the Dorsey Wright Momentum Plus Value Index, which selects stocks based on relative strength (momentum) and value metrics.

Composition The ETF holds a diversified portfolio of U.S. equities selected based on momentum and value criteria.

Market Share: DVLU's market share within the Smart Beta Equity ETF space is relatively small.

Total Net Assets (AUM): 166800000

Key Competitors

• Invesco S&P 500 Pure Value ETF (RPV)
• Vanguard Value ETF (VTV)
• iShares Russell 1000 Value ETF (IWD)
• Schwab Fundamental U.S. Large Company ETF (FNDX)

Competitive Landscape

The smart beta equity ETF market is highly competitive, with numerous funds vying for investor capital. DVLU differentiates itself through its unique blend of momentum and value factors; however, it faces stiff competition from larger, more established value-focused ETFs. DVLU's competitive advantage stems from its proprietary index methodology, which may offer a different risk-return profile compared to traditional value or momentum ETFs. A disadvantage is its relatively small AUM, potentially leading to wider bid-ask spreads.

Historical Performance: Historical performance data needs to be retrieved dynamically from financial data providers. The ETF's returns have varied depending on market conditions and the effectiveness of its factor selection process.

Benchmark Comparison: Benchmark comparison needs to be retrieved dynamically from financial data providers. The ETF's performance should be compared to value and momentum indexes.

Expense Ratio: 0.29

Average Trading Volume

The average daily trading volume of DVLU provides sufficient liquidity for most retail investors.

Bid-Ask Spread

The typical bid-ask spread for DVLU indicates the cost of trading, generally a few cents per share.

Market Environment Factors

DVLU's performance is influenced by overall market trends, economic conditions, and investor sentiment towards value and momentum strategies. Changes in interest rates, economic growth, and sector rotations can significantly affect the fund's performance.

Growth Trajectory

The growth trajectory of DVLU depends on its ability to attract assets and generate competitive returns. The ETF may adjust its strategy based on market conditions and index methodology updates.

Competitive Edge

DVLUu2019s competitive edge comes from its distinct combination of momentum and value factors. Its methodology seeks to identify stocks that are both attractively valued and exhibiting positive price momentum. The fund's strategic approach differentiates it from pure value or momentum ETFs. First Trust's brand recognition and distribution network also contribute to its competitive advantage, although AUM is still low.

Volatility

DVLU's volatility is influenced by the volatility of its underlying holdings. As a factor-based ETF, its volatility can fluctuate depending on market conditions.

Market Risk

DVLU is subject to market risk, including the risk that its underlying holdings may decline in value due to economic downturns, industry-specific factors, or company-specific events.

Ideal Investor Profile

The ideal investor for DVLU is someone seeking exposure to a blend of value and momentum factors within a diversified portfolio.

Market Risk

DVLU is suitable for long-term investors seeking factor-based exposure and potential for capital appreciation.

First Trust Dorsey Wright Momentum & Value ETF (DVLU) offers exposure to US equities selected for their strong momentum and attractive value characteristics. While competing in a crowded space, DVLU's differentiated methodology aims to deliver enhanced returns. However, its relatively small AUM and the inherent cyclicality of factor-based investing should be considered. Therefore, it is suited for long-term investors, who understand the ETF's investment approach, who are willing to embrace the volatility and potential long-term benefits of a momentum and value factor investing.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Market share data is based on available public information and may not be precise.