ETF Education Report: DTRE

What this ETF is trying to do

The FIRST TRUST ALERIAN DISRUPTIVE TECHNOLOGY REAL ESTATE ETF (ticker: DTRE) is an exchange-traded fund that focuses on real estate. Based on its name and holdings, it looks at companies involved in disruptive technology within the real estate sector.

Top Holdings

The following are some of the largest companies held by this ETF. Please note that this is a partial list and holdings can change over time:

• American Tower Corp (7.16%)

• Digital Realty Trust Inc (6.98%)

• Equinix Inc (6.90%)

• SBA Communications Corp Class A (6.49%)

• Prologis Inc (6.48%)

• Crown Castle Inc (6.36%)

• Rexford Industrial Realty Inc (5.23%)

What the numbers show

When looking at an ETF, it is important to understand the difference between price return and total return. Price return only tracks how much the share price moves. Total return includes both the price movement and any cash distributions (dividends) paid out.

• Year-to-Date (YTD): The YTD price return is approximately 0.18%, while the YTD total return is approximately 1.91%.

• One Year: The one-year price return was approximately -1.59%. However, the one-year total return was approximately 2.56%.

• Three Year: The three-year price return was approximately 6.53%, and the three-year total return was approximately 17.49%.

For a price comparison, the current price is $39.50. The estimated price from roughly one year ago was approximately $40.14.

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is approximately 4.22%. This number describes the cash paid out relative to the ETF's price. It is important to remember that a high yield does not mean the investor earned that same percentage as total return.

The ETF usually pays distributions quarterly, and it has made 4 payments over the last 12 months.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes look like erosion, they are not always the same thing.

For DTRE, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• Total Return vs. Price: Even when the share price went down over the last year, the total return remained positive due to distributions.

• Stable Risk Score: The fund has a high erosion-risk score, suggesting price stability according to this measurement.

Cons

• Price Fluctuations: The one-year price return was negative, meaning the share price itself decreased over that period.

• Five-Year Performance: The five-year total return was approximately -8.34%.

Beginner takeaway

When studying DTRE, notice how the total return is often higher than the price return. This happens because the cash distributions add value to the overall investment. Always look at both numbers to get a full picture of how an ETF is performing.