What this ETF is trying to do

The FIRST TRUST DORSEY WRIGHT FOCUS 5 ETF (ticker: FV) is an exchange-traded fund that focuses on a small number of specific holdings. Based on the data, this ETF holds only five different assets.

Top Holdings:

• FIRST TRUST NYSE ARCA BIOTECH ETF (20.18%)

• FIRST TRUST TECHNOLOGY ALPHADEX® ETF (20.16%)

• FIRST TRUST NASDAQ PHARMACEUTICALS ETF (20.10%)

• FIRST TRUST NASDAQ OIL & GAS ETF (19.92%)

• FIRST TRUST NASDAQ TRANSPORTATION ETF (19.50%)

Please note that holdings can change over time.

What the numbers show

The current price of this ETF is $74.95. An estimated price from roughly one year ago was $62.33.

To see how the share price has moved, we look at "price return." This only measures the change in the cost of a single share. To see "total return," we look at both the share price change and any cash payments (distributions) made to investors.

• Year-to-Date (YTD): The price return is 19.12%, while the total return is 19.34%.

• One-Year: The price return is approximately 20.25%, and the total return is approximately 20.73%.

• Three-Year: The price return is approximately 68.92%, and the total return is approximately 70.74%.

If you had invested $10,000 into just the share price one year ago, your investment would have grown based on the estimated price change from $62.33 to $74.95.

Income and distribution explanation

Some investors look for ETFs that pay out cash. This is called a "distribution yield." For this ETF, the distribution yield is 0.35%. The trailing distributions were $0.26.

It is important to know that these payments are "irregular," meaning they do not happen on a set schedule. Also, a distribution yield is not the same as total return. A high yield does not guarantee that an investor will make money if the share price falls.

NAV erosion explanation

"NAV erosion" is a term used to describe when the actual value of the assets inside an ETF drops significantly over time. It is important to distinguish between a falling market price and NAV erosion.

For this ETF, the StockValueFinder erosion-risk score is 100, which is labeled as "No price erosion detected." The erosion severity is listed as "good," and there is no severe erosion-risk flag.

Pros

• The ETF has shown positive price returns and total returns over the last year and the last three years.

• The data shows no detected price erosion.

Cons

• The ETF only holds five assets, which means it is very concentrated in those specific areas.

• The cash distributions are irregular and do not happen frequently.

Beginner takeaway

This ETF focuses on a very small group of holdings. Recently, both the share price and the total return have increased. While it does pay some cash distributions, they are infrequent. There are currently no warnings regarding price erosion for this fund.