DDIV Profile
The First Trust Dorsey Wright Momentum & Dividend ETF is an actively managed exchange-traded fund designed to deliver a combination of capital appreciation and income through a strategic investment approach. The fund typically invests at least 90% of its net assets, including any investment borrowings, in equity securities that are part of its underlying index. This index is meticulously crafted to capture the performance of the top 50 stocks within the NASDAQ US Large Mid Index, which are selected based on their high dividend yields while maintaining strong momentum characteristics.
The underlying index combines two key investment strategies: high dividend yield and momentum. Dividend yield refers to the income generated from a stock relative to its price, providing investors with regular income through dividends. Momentum investing focuses on stocks that have shown strong performance trends, expecting these trends to continue. By integrating these two strategies, the fund aims to offer a blend of reliable income and growth potential, targeting companies that not only provide substantial dividends but also exhibit positive performance momentum.
The fund's portfolio is constructed by selecting stocks from the NASDAQ US Large Mid Index that meet specific criteria related to dividend yield and momentum. This index represents a broad spectrum of large- and mid-cap U.S. equities, providing exposure to a diverse range of sectors and industries. The combination of high dividend yields and momentum-driven selection helps in targeting companies that are likely to deliver both attractive income and potential capital gains. As a result, the fund seeks to offer investors a balanced approach to growth and income.
Investors in the First Trust Dorsey Wright Momentum & Dividend ETF can benefit from a strategic exposure to dividend-paying stocks with favorable performance trends. The fund's focus on both high yield and momentum aims to capture market opportunities while managing risks associated with equity investments. Investors should consider their individual financial goals and risk tolerance, as the fund's performance will be influenced by the broader equity market conditions, dividend trends, and the specific momentum characteristics of the selected stocks.
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