Yesterday First Trust unveiled a trio of ETFs that each target the momentum factor and another different factor. One is a renovation of an existing ETF, but the other two are brand-new products.
Each comes with an expense ratio of 0.60% and lists on the Nasdaq stock exchange.
The trio of ETFs includes:
- First Trust Dorsey Wright Momentum & Value ETF (DVLU)
- First Trust Dorsey Wright Momentum & Low Volatility ETF (DVOL)
- First Trust Dorsey Wright Momentum & Dividend ETF (DDIV)
Methodology & Details
The funds’ indexes select their components from the NASDAQ US Large Mid Index. The momentum component relies on the Dorsey Wright relative strength methodology to determine which companies are showing the strongest forward-price momentum. Only companies exhibiting high levels of relative strength are allowed to remain in the selection pool.
From there, companies are scored based on the targeted secondary factor—value, low volatility or dividend—with the top 50 securities selected for inclusion and weighted according to those factor scores.
Although DVLU and DVOL are both completely new, DDIV was previously known as the First Trust RBA Quality Income ETF (QINC). Its index, fund name and ticker officially changed at the same time the other two funds launched.
Contact Heather Bell at [email protected]