FDM: FIRST TRUST DOW JONES SELECT MICROCAP INDEX FUND
Understanding the First Trust Dow Jones Select Microcap Index Fund (FDM)
The First Trust Dow Jones Select Microcap Index Fund (FDM) is an ETF designed to track a specific index of microcap companies. Microcap companies are generally smaller businesses. This fund provides exposure to these smaller stocks through its portfolio.
What the numbers show
The data shows that FDM has experienced significant growth in its share price over several timeframes.
• Year-to-Date (YTD): The price return is approximately 11.35%.
• One-Year: The share-price return was approximately 17.27%.
• Three-Year: The share-price return was approximately 64.18%.
It is important to distinguish between price return and total return. Price return only tracks how much the share price itself has changed. Total return includes both the price change and any distributions (cash payments) made to investors.
For FDM, the total returns are higher than the price returns because they include those distributions:
• YTD Total Return: Approximately 12.61%.
• One-Year Total Return: Approximately 19.14%.
• Three-Year Total Return: Approximately 72.14%.
Based on an estimated price from roughly one year ago of $75.60, the current price is $88.65.
Income and distribution explanation
FDM pays out cash distributions to investors. The distribution yield is approximately 1.54%. This number describes the cash distributions relative to the current ETF price.
The fund usually pays out on a quarterly basis, having made 4 payments over the last 12 months. The most recent trailing distributions totaled approximately $1.37 per share. While these payments provide cash income, they are not the same as total return.
NAV erosion explanation
"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). A falling market price does not always mean NAV is eroding.
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 erosion-risk score is 100, which is labeled as "No price erosion detected," and the 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 fund (note that this list is partial):
• Stoke Therapeutics Inc (2.11%)
• Dauch Corp (1.76%)
• NWPX Infrastructure Inc (1.68%)
• Tetra Technologies Inc (1.60%)
• Deluxe Corp (1.56%)
• United Fire Group Inc (1.42%)
• USA Today Co Inc (1.41%)
• Douglas Dynamics Inc (1.40%)
• Horizon Bancorp (In) (1.35%)
• Central Pacific Financial Corp (1.31%)
Holdings can change over time.
Pros
• Strong historical price-based returns over the one-year and three-year periods.
• No detected price erosion according to the erosion-risk score.
Cons
• The fund invests in microcap companies, which are generally smaller businesses.
Beginner takeaway
FDM is an ETF that focuses on small microcap companies. It has shown both price growth and total returns over the last few years. While it provides a modest distribution yield, investors should remember that price returns and total returns are different, and high yields alone do not guarantee overall investment success.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | STOKE THERAPEUTICS INC | STOK | 2.11% |
| 2 | DAUCH CORP | DCH | 1.76% |
| 3 | NWPX INFRASTRUCTURE INC | NWPX | 1.68% |
| 4 | TETRA TECHNOLOGIES INC | TTI | 1.60% |
| 5 | DELUXE CORP | DLX | 1.56% |
| 6 | UNITED FIRE GROUP INC | UFCS | 1.42% |
| 7 | USA TODAY CO INC | TDAY | 1.41% |
| 8 | DOUGLAS DYNAMICS INC | PLOW | 1.40% |
| 9 | HORIZON BANCORP (IN) | HBNC | 1.35% |
| 10 | CENTRAL PACIFIC FINANCIAL CORP | CPF | 1.31% |