Understanding the FIRST TRUST DORSEY WRIGHT INTERNATIONAL FOCUS 5 ETF (IFV)

The FIRST TRUST DORSEY WRIGHT INTERNATIONAL FOCUS 5 ETF (ticker: IFV) is an exchange-traded fund designed to provide exposure to international markets. Based on its holdings, it focuses on specific regions like Europe and Asia (excluding Japan) through a selection of other specialized funds.

What this ETF is trying to do

This ETF seeks to provide international market exposure by investing in a concentrated group of other ETFs. Instead of buying hundreds of individual company stocks directly, it holds five specific funds to cover different international regions.

Top Holdings:

• FIRST TRUST EUROPE ALPHADEX® ETF (21.19%)

• FIRST TRUST EUROZONE ALPHADEX® ETF (20.75%)

• FIRST TRUST GERMANY ALPHADEX® ETF (20.26%)

• FIRST TRUST ASIAPAC EX-JPN ALPHADEX® ETF (19.21%)

• FIRST TRUST INTERNATIONAL EQ OPPS ETF (18.51%)

*Note: Holdings are subject to change over time.*

What the numbers show

When looking at how IFV has performed, it is important to distinguish between price return (the change in the share price) and total return (which includes the value of distributions).

• Year-to-Date (YTD): The price return is approximately 0.19%, while the total return is approximately 1.53%.

• One-Year: The price return was approximately 0.57%, while the total return was approximately 2.55%.

• Three-Year: The price return was approximately 42.97%, while the total return was approximately 52.66%.

The difference between these two numbers shows that distributions have added value to the overall return. For example, over the last three years, the total return was nearly 10% higher than the price return alone.

Income and distribution explanation

IFV provides cash distributions to investors. The current distribution yield is approximately 2.02%. This means the amount of cash paid out is about 2.02% of the current share price.

The fund typically pays distributions on a quarterly basis. Over the last 12 months, there were 4 payouts. Most of these payments have occurred on Thursdays.

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, we can look at the erosion-risk score, which is 94. This is labeled as "Stable / sideways," and the erosion severity is rated as "good." There is no severe erosion-risk flag for this ETF.

Pros

• Strong Three-Year Performance: The fund has shown significant total returns over a three-year period.

• Stable Risk Profile: The erosion-risk score suggests the price has been relatively stable rather than steadily declining.

• Diversified International Exposure: It uses a "fund of funds" approach to cover multiple international regions.

Cons

• Concentrated Holdings: The ETF relies heavily on only five underlying funds.

• Moderate Yield: While it provides income, the 2.02% yield may be lower than what some income-focused investors seek.

Beginner takeaway

IFV is an international ETF that uses a small number of other funds to gain exposure to global markets. It has shown a history of positive total returns, meaning investors saw growth from both share price increases and cash distributions. While it provides regular quarterly income, investors should always remember that a distribution yield is just one part of an ETF's overall performance.