First Trust Dorsey Wright Momentum & Low Volatility ETF (DVOL)

Overview

The First Trust Dorsey Wright Momentum & Low Volatility ETF (DVOL) seeks capital appreciation by investing in U.S. large-cap stocks with high momentum and low volatility characteristics. The fund uses a rules-based approach to select and weight securities, aiming to outperform traditional market-cap weighted indexes while managing risk.

Reputation and Reliability

First Trust is a well-established ETF provider known for its innovative investment strategies and rules-based approach.

Management Expertise

First Trust has a dedicated team of investment professionals experienced in developing and managing quantitative and factor-based ETFs.

Goal

The ETF seeks capital appreciation.

Investment Approach and Strategy

Strategy: The ETF does not track a specific market cap-weighted index. Instead, it uses a proprietary methodology based on momentum and low volatility factors.

Composition The ETF primarily holds U.S. large-cap stocks selected based on momentum and low volatility criteria.

Market Share: DVOL holds a niche market share in the smart beta ETF segment focusing on momentum and low volatility.

Total Net Assets (AUM): 70521000

Key Competitors

• Invesco S&P 500 Low Volatility ETF (SPLV)
• iShares MSCI USA Min Vol Factor ETF (USMV)
• Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)
• iShares Edge MSCI Min Vol USA ETF (USMV)

Competitive Landscape

The competitive landscape is dominated by low volatility ETFs, with several established players offering similar strategies. DVOL differentiates itself by incorporating a momentum factor, potentially offering higher returns during specific market cycles compared to purely low volatility approaches. However, this could also lead to higher volatility during certain periods. Competitors typically focus solely on the low volatility factor or incorporate dividend yield.

Historical Performance: Historical performance data is not provided in this JSON output.

Benchmark Comparison: Benchmark comparison is not provided in this JSON output.

Expense Ratio: 0.0295

Average Trading Volume

The ETF's liquidity is adequate, with an average daily trading volume that facilitates relatively easy trading for most investors.

Bid-Ask Spread

The bid-ask spread is typically competitive, reflecting the ETF's reasonable liquidity and trading efficiency.

Market Environment Factors

DVOL's performance is influenced by overall market sentiment, interest rate changes, and the relative performance of momentum and low volatility factors. Economic growth and sector rotation can also impact the ETF's holdings and performance.

Growth Trajectory

DVOL's growth trajectory depends on its ability to consistently deliver competitive risk-adjusted returns compared to its peers. Any changes to the underlying methodology or holdings could impact future performance and growth.

Competitive Edge

DVOLu2019s competitive advantage lies in its unique combination of momentum and low volatility factors, which aims to capture upside potential while mitigating downside risk. The fund's rules-based approach provides transparency and consistency. This dual-factor strategy may attract investors seeking a balance between growth and risk management. The fund's relatively small size may allow for more nimble adjustments to its portfolio compared to larger competitors.

Volatility

DVOL's volatility will vary depending on market conditions and the performance of its underlying holdings. The inclusion of a low volatility factor aims to mitigate overall volatility compared to broader market indexes.

Market Risk

The ETF is subject to market risk, including the potential for losses due to declines in the value of its underlying stocks. Specific risks include the possibility that the momentum or low volatility factors may underperform during certain market cycles.

Ideal Investor Profile

The ideal investor for DVOL is someone seeking capital appreciation with a moderate risk tolerance, interested in factor-based investing, and looking for a potentially balanced approach to growth and risk management.

Market Risk

DVOL is suitable for long-term investors and active traders who understand factor-based investing and are comfortable with the potential for fluctuations in value.

First Trust Dorsey Wright Momentum & Low Volatility ETF is designed for investors seeking capital appreciation with managed risk. It combines momentum and low volatility factors in a rules-based approach to select U.S. large-cap stocks. The ETF differentiates itself from competitors by using this combined strategy and offers a balance between capturing upside potential and mitigating downside risk. DVOL's performance is influenced by market conditions and the effectiveness of its factor selection process, making it suited for investors with a moderate risk tolerance.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Market share data is approximate and may vary depending on the source and methodology.