First Trust Dorsey Wright Focus 5 ETF (FV)

Overview

The First Trust Dorsey Wright Focus 5 ETF (FV) seeks capital appreciation by investing in a portfolio of First Trust ETFs selected using Dorsey Wright's relative strength methodology. It aims to outperform a passive, equal-weighted portfolio of these ETFs by focusing on those with the strongest price momentum.

Reputation and Reliability

First Trust is a well-established ETF provider with a strong reputation for innovative and thematic investment strategies.

Management Expertise

First Trust has extensive experience in managing ETFs and utilizes the Dorsey Wright relative strength methodology, which has a long track record.

Goal

Seeks capital appreciation.

Investment Approach and Strategy

Strategy: Uses a relative strength strategy by Dorsey Wright to identify and invest in five top-ranked First Trust sector and industry ETFs.

Composition Primarily composed of other First Trust ETFs, representing various sectors and industries.

Market Share: FV's market share within the tactical allocation ETF segment is relatively small, as it's a niche strategy.

Total Net Assets (AUM): 457000000

Key Competitors

• Invesco DWA Momentum ETF (PDP)
• iShares Edge MSCI USA Momentum Factor ETF (MTUM)
• Alpha Architect U.S. Quantitative Momentum ETF (QMOM)

Competitive Landscape

The tactical allocation ETF landscape is competitive. FV distinguishes itself through its reliance on First Trust ETFs and the Dorsey Wright relative strength methodology. Advantages include the potential for higher returns through momentum investing. Disadvantages include higher turnover and potential underperformance during market corrections.

Historical Performance: Data not provided in source data. Performance data would include returns over 1, 3, 5, and 10-year periods.

Benchmark Comparison: Performance relative to a broad market index and other tactical allocation ETFs should be assessed. The benchmark is generally a broad-based market index, but a comparison to similar momentum based etfs is also informative.

Expense Ratio: 0.0091

Average Trading Volume

FV's average trading volume is moderate, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread is generally tight, suggesting efficient trading and low transaction costs.

Market Environment Factors

Economic growth, interest rate changes, and sector-specific trends all affect FV, with market volatility potentially increasing the frequency of portfolio adjustments.

Growth Trajectory

FV's growth depends on the continued popularity of momentum investing and the performance of the First Trust ETFs it holds; changes to the Dorsey Wright methodology could also impact the fund's holdings and performance.

Competitive Edge

FV's competitive edge lies in its combination of the Dorsey Wright relative strength methodology and its focus on First Trust ETFs. This allows it to capitalize on market momentum within the First Trust product suite. The fund's selection process aims to identify the top-performing sectors and industries. It offers diversification through its underlying ETF holdings, with regular rebalancing to maintain its investment strategy. It targets investors seeking higher returns through active management, accepting the associated risks and costs.

Volatility

FV's volatility may be higher than broad market ETFs due to its active management and momentum-based strategy.

Market Risk

The underlying assets, being sector and industry-specific ETFs, are subject to sector-specific risks, as well as general market risk.

Ideal Investor Profile

FV is suited for investors seeking capital appreciation and are comfortable with a higher level of risk associated with momentum-based investing and sector concentration.

Market Risk

FV is best for active traders and investors with a moderate to high-risk tolerance, and it should be used as a tactical allocation within a diversified portfolio.

The First Trust Dorsey Wright Focus 5 ETF is a tactical allocation fund that invests in other First Trust ETFs based on the Dorsey Wright relative strength methodology. Its goal is to achieve capital appreciation through momentum investing. The fund's performance is influenced by market trends, sector rotations, and the selection of top-performing First Trust ETFs. Investors should be aware of the higher volatility and potential for turnover associated with this active management strategy. FV is appropriate for investors with a moderate-to-high risk tolerance seeking to outperform broad market indices.

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. Consult with a qualified financial advisor before making any investment decisions.