What this ETF is trying to do

The FIRST TRUST DORSEY WRIGHT MOMENTUM & VALUE ETF (ticker: DVLU) is an exchange-traded fund designed to invest using a specific strategy. It focuses on finding stocks that show both "momentum" and "value." This means the fund looks for companies that are currently seeing price movement in a certain direction while also appearing to be priced reasonably.

What the numbers show

The data shows that DVLU has experienced significant growth over different time periods. When looking at the share price alone (the price return), here is how it has performed:

• Year-to-Date (YTD) Price Return: Approximately 10.51%

• One-Year Price Return: Approximately 17.26%

• Three-Year Price Return: Approximately 75.84%

It is important to distinguish between price return and total return. Total return includes both the change in share price and any cash distributions paid out to investors. The total returns for this ETF are slightly higher than the price returns:

• YTD Total Return: Approximately 11.14%

• One-Year Total Return: Approximately 18.20%

• Three-Year Total Return: Approximately 81.11%

Based on an estimated price from roughly one year ago of $33.68, the current price is $39.49.

Income and distribution explanation

DVLU provides cash distributions to investors. The distribution yield is approximately 0.77%. This number describes the cash paid out relative to the ETF's current price. The fund usually pays these distributions on a quarterly basis, with 4 payments recorded 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). 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, regarding price erosion (the decline in the market price of the shares), the fund has an erosion score of 100, which is labeled as "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Top Holdings

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

• General Motors Co (3.92%)

• Invesco Ltd (3.63%)

• Oshkosh Corp (3.26%)

• HF Sinclair Corp (3.19%)

• TD Synnex Corp (3.18%)

• Apollo Global Management Inc (3.13%)

• BorgWarner Inc (3.05%)

• Edison International (2.99%)

• Franklin Templeton Inc (2.90%)

• Principal Financial Group Inc (2.90%)

Pros and Cons

Pros:

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

• The erosion-risk measurements suggest the share price has been stable rather than declining.

Cons:

• The distribution yield is relatively low at 0.77%.

• As with all ETFs, the holdings can change over time.

Beginner takeaway

DVLU is an ETF that seeks to combine momentum and value strategies. For investors, the main takeaway is that while it provides some quarterly income, its primary growth has come from share-price increases. The data shows no signs of price erosion according to the current risk scores.