Index-tracking ETFs which combine factor
investing with Dorsey Wright’s systematic momentum strategy
First Trust Advisors L.P. (“First Trust”), a leading
exchange-traded fund (“ETF”) provider and asset manager, announced
today that three First Trust Dorsey Wright Momentum Plus ETFs (the
“funds”) began trading on The Nasdaq Stock Market LLC. The funds
seek investment results that correspond generally to the price and
yield (before the funds’ fees and expenses) of the Dorsey Wright
Momentum Plus Indexes (the “indexes”). The rules-based equity
indexes are designed to select securities based on individual stock
momentum using Dorsey, Wright & Associates' (DWA) proprietary
relative strength methodology, plus a fundamental factor (value,
dividend yield or volatility).
“In our view, the First Trust Dorsey Wright Momentum Plus ETFs
are effective tools for investment advisors looking to target
exposure to a combination of relative strength—or momentum—with
other well-known fundamental factors, including value, dividend
yield, and low volatility,” said Ryan Issakainen, CFA, Senior Vice
President, Exchange-Traded Fund Strategist at First Trust. Relative
strength is a ranking system used to measure a security’s price
momentum relative to its peers. DWA believes combining relative
strength with a factor-based investing strategy provides the
ability to hone in on a desirable characteristic of a stock and the
potential for more attractive excess returns than the individual
strategies may achieve separately from one another. “Dorsey
Wright’s research on relative strength is widely followed and we
are pleased to offer these funds which incorporate their insights,”
Issakainen said. The three ETFs are listed below:
First Trust Dorsey Wright Momentum & Dividend ETF
(Nasdaq: DDIV)First Trust Dorsey Wright Momentum & Value
ETF (Nasdaq: DVLU)First Trust Dorsey Wright Momentum &
Low Volatility ETF (Nasdaq: DVOL)
Prior to September 6, 2018, the First Trust Dorsey Wright
Momentum & Dividend ETF’s investment objective was to seek to
track the Richard Bernstein Advisors Quality Income Index. The
fund, formerly known as the First Trust RBA Quality Income ETF,
previously traded under the ticker symbol QINC.
For more information about First Trust, please contact Ryan
Issakainen CFA, Senior Vice President, ETF Strategist at (630)
765-8689 or RIssakainen@FTAdvisors.com.
About First Trust
First Trust is a federally registered investment advisor and
serves as the fund’s investment advisor. First Trust and its
affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered
broker-dealer, are privately held companies that provide a variety
of investment services. First Trust has collective assets under
management or supervision of approximately $130 billion as of July
31, 2018 through unit investment trusts, exchange-traded funds,
closed-end funds, mutual funds and separate managed accounts. First
Trust is the supervisor of the First Trust unit investment trusts,
while FTP is the sponsor. FTP is also a distributor of mutual fund
shares and exchange-traded fund creation units. First Trust and FTP
are based in Wheaton, Illinois. For more information, visit
http://www.ftportfolios.com.
You should consider the funds’ investment objectives, risks,
and charges and expenses carefully before investing. Contact First
Trust Portfolios L.P. at 1-800-621-1675 or visit
www.ftportfolios.com to obtain a prospectus or summary
prospectus which contains this and other information about the
funds. The prospectus or summary prospectus should be read
carefully before investing.
ETF Characteristics
The funds list and principally trade their shares on The Nasdaq
Stock Market LLC.
The funds’ return may not match the return of the applicable
index. The securities held by the funds will generally not be
bought or sold in response to market fluctuations.
Investors buying or selling fund shares on the secondary market
may incur customary brokerage commissions. Market prices may differ
to some degree from the net asset value of the shares. Investors
who sell fund shares may receive less than the share’s net asset
value. Shares may be sold throughout the day on the exchange
through any brokerage account. However, unlike mutual funds, shares
may only be redeemed directly from the funds by authorized
participants, in very large creation/redemption units. If the
funds’ authorized participants are unable to proceed with
creation/redemption orders and no other authorized participant is
able to step forward to create or redeem, fund shares may trade at
a discount to the funds’ net asset value and possibly face
delisting.
Risk Considerations
The funds’ shares will change in value, and you could lose money
by investing in the funds. One of the principal risks of investing
in the funds is market risk. Market risk is the risk that a
particular stock owned by the funds, fund shares or stocks in
general may fall in value. There can be no assurance that the
funds’ investment objectives will be achieved.
The funds may invest in securities issued by companies
concentrated in a particular industry or sector, which involves
additional risks, including limited diversification. The funds may
invest in small capitalization and mid capitalization companies.
Such companies may experience greater price volatility than larger,
more established companies. A fund may invest in depositary
receipts which may be less liquid than the underlying shares in
their primary trading market.
The funds are not actively managed and generally will not
attempt to take defensive positions in declining markets.
There is no guarantee that the issuers of the funds’ portfolio
securities will declare dividends in the future or that, if
declared, they will either remain at current levels or increase
over time.
The funds currently have fewer assets than larger funds, and
like other relatively new funds, large inflows and outflows may
impact the funds’ market exposure for limited periods of time.
The intrinsic value of a stock with value characteristics may
not be fully recognized by the market for a long time or a stock
judged to be undervalued may actually be appropriately priced at a
low level.
A portfolio comprised of low volatility stocks may not produce
investment exposure that has lower variability to changes in such
stocks’ price levels. Low volatility stocks are likely to
underperform the broader market during periods of rapidly rising
stock prices.
A fund’s strategy may frequently involve buying and selling
portfolio securities pursuant to its principal investment strategy.
High portfolio turnover may result in a fund paying higher levels
of transaction costs and generating greater tax liabilities for
shareholders. Portfolio turnover risk may cause a fund’s
performance to be less than you expect.
The indexes employ a "momentum" style methodology that emphasize
selecting stocks that have had higher recent price performance
compared to other stocks. Momentum can turn quickly and cause
significant variation from other types of investments.
As the use of Internet technology has become more prevalent in
the course of business, the funds have become more susceptible to
potential operational risks through breaches in cyber security.
The funds are classified as "non-diversified" and may invest a
relatively high percentage of their assets in a limited number of
issuers. As a result, the funds may be more susceptible to a single
adverse economic or regulatory occurrence affecting one or more of
these issuers, experience increased volatility and be highly
concentrated in certain issuers.
First Trust Advisors L.P. is the adviser to the funds. First
Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P.,
the funds’ distributor.
The information presented is not intended to constitute an
investment recommendation for, or advice to, any specific person.
By providing this information, First Trust is not undertaking to
give advice in any fiduciary capacity within the meaning of ERISA
and the Internal Revenue Code. First Trust has no knowledge of and
has not been provided any information regarding any investor.
Financial advisors must determine whether particular investments
are appropriate for their clients. First Trust believes the
financial advisor is a fiduciary, is capable of evaluating
investment risks independently and is responsible for exercising
independent judgment with respect to its retirement plan
clients.
The funds are not sponsored, endorsed, sold or promoted by
Nasdaq, Inc. or its affiliates (Nasdaq, with its affiliates, are
referred to as the "Corporations"). The Corporations have not
passed on the legality or suitability of, or the accuracy or
adequacy of descriptions and disclosures relating to, the funds.
The Corporations make no representation or warranty, express or
implied to the owners of the funds or any member of the public
regarding the advisability of investing in securities generally or
in the funds particularly, or the ability of the indexes to track
general stock performance.
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version on businesswire.com: https://www.businesswire.com/news/home/20180906005535/en/
First TrustRyan Issakainen(630)
765-8689RIssakainen@FTAdvisors.com
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