What this ETF is trying to do

The FIRST TRUST DORSEY WRIGHT MOMENTUM & DIVIDEND ETF (ticker: DDIV) is an exchange-traded fund designed to focus on specific investment goals. Based on its name, it looks for companies that show both momentum and dividend characteristics. This ETF holds a total of 51 different investments.

What the numbers show

When looking at how this ETF has performed, it is important to understand two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price.

• Total Return: This includes both the share price changes and the money paid out through distributions.

According to the supplied data, DDIV has shown growth in both areas:

• Year-to-Date (YTD): The price return is approximately 7.60%, while the total return is approximately 8.73%.

• One-Year: The price return was approximately 12.70%, and the total return was approximately 14.66%.

• Three-Year: The price return was approximately 62.09%, and the total return was approximately 73.03%.

An estimated price from roughly one year ago was $39.66, compared to the current price of $44.70.

Income and distribution explanation

DDIV provides cash to investors through distributions. The current distribution yield is approximately 1.65%. This number describes the cash payments relative to the ETF's price. The trailing distributions are $0.7385.

The fund usually pays out on a quarterly basis, with 4 payments recorded over the last 12 months. Most of these payments have historically occurred on Thursdays.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

However, the fund's price-based health looks stable. The erosion-risk score is 100, which is labeled as "No price erosion detected," and the erosion severity is rated as "good." There is no severe erosion-risk flag for this ETF.

Top Holdings

The following are the top holdings in the portfolio (note that this list is partial):

• HF Sinclair Corp (4.45%)

• Invesco Ltd (4.42%)

• Franklin Templeton Inc (4.41%)

• Lamar Advertising Co Class A (4.33%)

• Simon Property Group Inc (4.26%)

• Caretrust REIT Inc (4.00%)

• Edison International (3.76%)

• Iron Mountain Inc (3.43%)

• Principal Financial Group Inc (3.37%)

• AbbVie Inc (3.14%)

Please remember that holdings can change over time.

Pros

• The ETF has shown positive price returns and total returns over the one-year and three-year periods.

• The erosion-risk score indicates no price erosion has been detected.

Cons

• The distribution yield is relatively low at 1.65%.

Beginner takeaway

DDIV is an ETF that has experienced both share-price growth and total returns over the last few years. While it pays regular distributions, investors should remember that a distribution yield is not the same as total return. Always look at both the price movement and the cash payments to see the full picture of how an ETF is performing.