What this ETF is trying to do

The FIRST TRUST DORSEY WRIGHT MOMENTUM & LOW VOLATILITY ETF (ticker: DVOL) is designed to invest in a specific mix of stocks. It looks for "momentum," which means it tries to find companies whose stock prices are moving in a positive direction. At the same time, it focuses on "low volatility." This means it seeks out stocks that do not experience large or frequent price swings.

What the numbers show

The current price of this ETF is $35.51. To understand how it has performed recently, we can look at its returns over different periods:

• One-Year Performance: The share-price change (price return) over the last year was 1.64%. When you include distributions, the total return for that same period was 2.48%.

• Three-Year Performance: Over three years, the price return was 41.25%, while the total return was 44.92%.

• Year-to-Date (YTD): So far this year, the price return is 1.36% and the total return is 1.91%.

To put these numbers into perspective, imagine you had $10,000 invested in this ETF one year ago. Based on the estimated price from roughly one year ago ($34.94) and the current price ($35.51), your investment would be worth about $10,164 today based only on the share-price change (the 1.64% price return).

Income and distribution explanation

This ETF provides cash distributions to investors. The distribution yield is 0.83%. This number tells you how much cash the fund pays out relative to its current price. These payments usually happen on a quarterly basis. It is important to remember that a distribution yield is not the same as the total return of the investment.

NAV erosion explanation

StockValueFinder uses an "erosion-risk score" to help investors understand if the value of the fund's underlying assets might be shrinking. This is called "NAV erosion."

For DVOL, the erosion-risk score is 94. The label for this score is "Stable / sideways," and the severity is rated as "good." A falling share price does not always mean that NAV erosion is happening; these scores are just measurements of risk based on specific screening rules.

Pros

• Strong Long-Term Growth: The ETF has shown significant growth over a three-year period, with a total return of 44.92%.

• Stable Risk Rating: It has a high erosion-risk score of 94 and is labeled as "good" for severity.

• Consistent Payouts: The fund has made four distributions over the last 12 months.

Cons

• Slow Recent Price Growth: The one-year price return of 1.64% is much lower than its three-year performance.

• Lower Yield: The distribution yield of 0.83% is relatively low for investors seeking high cash income.

Portfolio Exposure

The following are the Top Holdings (this is a partial list):

• TJX: 3.34%

• VTR: 3.15%

• WELL: 3.13%

• BNY: 3.11%

• OHI: 3.05%

• ETR: 2.98%

• DTM: 2.93%

• AME: 2.90%

• JPM: 2.89%

• COST: 2.79%

Please note that these holdings can change over time.

Beginner takeaway

DVOL is an ETF that looks for stocks with steady upward movement and lower price swings. While it has shown very strong growth over the last three years, its performance over the last year has been much slower. It offers a small amount of regular cash distributions and currently shows a stable risk profile regarding the value of its underlying assets.