DVLU Profile
The First Trust Dorsey Wright Momentum & Value ETF seeks to provide investors with exposure to a select group of undervalued stocks that exhibit strong momentum characteristics. The fund operates with a clear focus on equity securities, investing at least 90% of its net assets, including any investment borrowings, in the securities that make up its underlying index. This commitment ensures that the majority of the fund's assets are allocated to the specific stocks that align with its strategic investment criteria.
The underlying index, known as the Dorsey Wright Momentum & Value Index, employs a rules-based methodology to identify and track the 50 most undervalued stocks within the NASDAQ US Large Mid Cap Index. This index is meticulously designed to capture companies that are not only undervalued but also exhibit strong momentum signals. The selection process integrates a combination of value and momentum factors, aiming to identify stocks with attractive valuation metrics alongside positive price momentum.
The fund’s approach combines value investing principles with momentum strategies, targeting stocks that are trading below their intrinsic value while demonstrating recent strong performance. By focusing on these criteria, the ETF seeks to capitalize on market inefficiencies and potential growth opportunities within the large and mid-cap segments of the U.S. equity market. The dual emphasis on value and momentum aims to enhance potential returns and provide a balanced exposure to dynamic and undervalued market segments.
The First Trust Dorsey Wright Momentum & Value ETF is positioned for investors seeking to harness the benefits of both value investing and momentum strategies within a single investment vehicle. Its strategy of investing in undervalued stocks with strong momentum is designed to capitalize on potential upside while mitigating risks associated with market volatility. This approach aims to deliver enhanced returns by focusing on stocks that offer a compelling combination of value and momentum characteristics.
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