What this ETF is trying to do

The FIRST TRUST DOW 30 EQUAL WEIGHT ETF (EDOW) is an exchange-traded fund designed to track the Dow 30. Unlike some funds that give more weight to larger companies, this ETF uses an "equal weight" approach. This means it tries to give each of its holdings a similar level of importance in the portfolio.

What the numbers show

The data shows that EDOW has experienced growth in both its share price and its total return.

• Price Return: This measures only the change in the share price. The year-to-date (YTD) price return is approximately 9.36%. Over the last year, the price return was approximately 13.33%. Looking back three years, the price return was approximately 55.80%.

• Total Return: This includes both the share price changes and the money paid out through distributions. The YTD total return is approximately 10.37%. The one-year total return was approximately 14.84%. Over three years, the total return was approximately 63.17%.

To give you an idea of price movement, the current price is $45.17. An estimated price from roughly one year ago was approximately $39.85.

Income and distribution explanation

EDOW provides cash distributions to investors. The distribution yield is approximately 1.25%. This number describes the cash payments relative to the current ETF price. The fund usually pays these distributions on a quarterly basis, with 4 payments recorded over the last 12 months.

It is important to remember that a distribution yield is not the same as total return. While distributions provide cash, they are only one part of how an investor might see value from an ETF.

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, looking at price-based evidence, 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 this ETF (note that this list is partial):

• Salesforce Inc (4.69%)

• Microsoft Corp (3.97%)

• Amgen Inc (3.96%)

• Merck & Co Inc (3.86%)

• The Travelers Companies Inc (3.75%)

• Visa Inc Class A (3.65%)

• JPMorgan Chase & Co (3.58%)

• Johnson & Johnson (3.47%)

• Sherwin-Williams Co (3.47%)

• Nvidia Corp (3.43%)

Holdings can change over time.

Pros

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

• The erosion-risk measurements suggest no significant price deterioration has been detected.

Cons

• The distribution yield is relatively low at approximately 1.25%.

Beginner takeaway

EDOW is an equal-weight ETF that tracks the Dow 30. It has shown growth in both share price and total return over the last several years. While it provides quarterly distributions, the yield is modest compared to some other types of income-focused funds.