First Trust Dorsey Wright Momentum & Dividend ETF (DDIV)
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Investment Objective/Strategy - The First Trust Dorsey Wright Momentum & Dividend ETF, formerly the First Trust RBA Quality Income ETF, seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an index called the Dorsey Wright Momentum Plus Dividend Yield™ Index (the "Index"). Under normal conditions, the Fund will invest at least 90% of its net assets (including investment borrowings) in the equity securities that comprise the Index. The Fund, using an indexing investment approach, attempts to replicate, before fees and expenses, the performance of the Index. The Fund's investment advisor seeks a correlation of 0.95 or better (before fees and expenses) between the Fund's performance and the performance of the Index; a figure of 1.00 would represent perfect correlation. The Index is owned and was developed by Nasdaq, Inc. (the "Index Provider").
There can be no assurance that the Fund's investment objectives will be achieved.
Index Description According to the Index Provider
  • The Dorsey Wright Momentum Plus Dividend Yield™ Index is a rules-based equity index that is designed to track the overall performance of the 50 highest dividend yielding stocks within the Nasdaq US Large Mid™ Index that maintain high levels of relative strength.
  • To construct the index, Dorsey, Wright & Associates (DWA) begins with the eligible constituents of the Nasdaq US Large Mid™ Index.
    • These eligible constituents are determined after meeting certain criteria, including maintaining a minimum average daily dollar volume of $1 million for the 30-day period prior to evaluation.
  • Each ssecurity is assigned a relative strength score based on its forward price momentum compared to the momentum of a broad market benchmark index. Securities that exhibit a minimum level of relative strength are eligible for inclusion in the index.
  • Eligible securities are then ranked based upon their current dividend yield, and the top 50 securities with the highest dividend yield are selected for inclusion in the index.
    • The securities are then weighted, with greater weights given to securities with higher dividend yields.
  • The index is reconstituted and rebalanced quarterly.
Fund Overview
TickerDDIV
Fund TypeLarge Value
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon Corp
CUSIP33738R696
ISINUS33738R6962
Intraday NAVDDIVIV
Fiscal Year-End09/30
ExchangeNasdaq
Inception3/10/2014
Inception Price$20.00
Inception NAV$20.00
Rebalance FrequencyQuarterly
Total Expense Ratio*0.60%
* As of 2/1/2024
Current Fund Data (as of 11/22/2024)
Closing NAV1$40.75
Closing Market Price2$40.78
Bid/Ask Midpoint$40.75
Bid/Ask Premium0.00%
30-Day Median Bid/Ask Spread30.13%
Total Net Assets$73,358,978
Outstanding Shares1,800,002
Daily Volume9,103
Average 30-Day Daily Volume12,273
Closing Market Price 52-Week High/Low$40.78 / $28.34
Closing NAV 52-Week High/Low$40.75 / $28.34
Number of Holdings (excluding cash)50
Top Holdings (as of 11/22/2024)*
Holding Percent
Kinder Morgan, Inc. 4.99%
Antero Midstream Corp. 4.81%
ONEOK, Inc. 4.43%
Simon Property Group, Inc. 4.40%
The Williams Companies, Inc. 3.99%
DT Midstream, Inc. 3.85%
Brixmor Property Group Inc. 3.68%
Blue Owl Capital Inc. (Class A) 3.63%
Lamar Advertising Company 3.46%
Jackson Financial Inc. (Class A) 2.62%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Overall Morningstar RatingTM (as of 10/31/2024)4

Among 373 funds in the Mid-Cap Value category. This fund was rated 3 stars/373 funds (3 years), 3 stars/361 funds (5 years), 4 stars/290 funds (10 years) based on risk adjusted returns.
Distribution Information
Dividend per Share Amt (as of 11/23/2024)5$0.1823
30-Day SEC Yield (as of 10/31/2024)62.16%
12-Month Distribution Rate (as of 10/31/2024)72.40%
Index Yield (as of 10/31/2024)82.77%
Fund Characteristics (as of 10/31/2024)9
Maximum Market Cap.$624,780
Median Market Cap.$24,936
Minimum Market Cap.$6,406
Price/Earnings17.98
Price/Book2.72
Price/Cash Flow12.96
Price/Sales2.13
Bid/Ask Premium/Discount (as of 11/22/2024)
  2023 Q1 2024 Q2 2024 Q3 2024
Days Traded at Premium 130 28 43 47
Days Traded at Discount 120 33 20 17
Top Sector Exposure (as of 11/22/2024)
Financials 34.12%
Energy 23.96%
Real Estate 15.72%
Consumer Discretionary 7.66%
Industrials 6.70%
Information Technology 4.07%
Materials 2.38%
Consumer Staples 2.33%
Health Care 1.20%
Utilities 1.09%
Communication Services 0.77%
Hypothetical Growth of $10,000 Since Inception (as of 11/20/2024) *
Tracking Index: Dorsey Wright Momentum Plus Dividend Yield™ Index

Month End Performance (as of 10/31/2024)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) 6.13% 24.72% 42.82% 7.44% 10.63% 8.88% 9.04%
After Tax Held 5.91% 23.92% 41.25% 6.07% 9.27% 7.61% 7.78%
After Tax Sold 3.62% 14.60% 25.23% 5.06% 7.69% 6.50% 6.67%
Market Price 6.13% 24.72% 42.82% 7.43% 10.62% 8.87% 9.04%
Index Performance **
Dorsey Wright Momentum Plus Dividend Yield™ Index 6.32% 25.51% 43.91% 8.20% 11.43% N/A N/A
Dow Jones U.S. Select Dividend Index 4.93% 18.57% 34.25% 8.84% 10.19% 9.83% 10.32%
S&P 500® Index 3.66% 20.97% 38.02% 9.08% 15.27% 13.00% 13.07%
Quarter End Performance (as of 9/30/2024)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Net Asset Value (NAV) 10.08% 22.85% 36.01% 9.14% 10.43% 9.36% 8.96%
After Tax Held 9.86% 22.06% 34.52% 7.74% 9.07% 8.09% 7.69%
After Tax Sold 5.97% 13.50% 21.22% 6.38% 7.53% 6.92% 6.59%
Market Price 10.08% 22.85% 35.97% 9.15% 10.42% 9.35% 8.96%
Index Performance **
Dorsey Wright Momentum Plus Dividend Yield™ Index 10.29% 23.54% 37.05% 9.91% 11.24% N/A N/A
Dow Jones U.S. Select Dividend Index 13.13% 18.82% 30.90% 9.97% 10.25% 10.48% 10.43%
S&P 500® Index 5.89% 22.08% 36.35% 11.91% 15.98% 13.38% 13.27%
3-Year Statistics (as of 10/31/2024)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
DDIV 19.13% -0.93 0.96 0.28 0.86
Dow Jones U.S. Select Dividend Index 17.10% 1.29 0.77 0.37 0.77
S&P 500® Index 17.20% --- 1.00 0.39 1.00
Standard Deviation is a measure of price variability (risk). Alpha is an indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.Beta is a measure of price variability relative to the market. Sharpe Ratio is a measure of excess reward per unit of volatility. Correlation is a measure of the similarity of performance.

*Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost.

After Tax Held returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold returns represent the return after taxes on distributions and the sale of fund shares. Returns do not represent the returns you would receive if you traded shares at other times. Market Price returns are determined by using the midpoint of the national best bid offer price ("NBBO") as of the time that the fund's NAV is calculated. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

**Performance information for each listed index is for illustrative purposes only and does not represent actual fund performance. Indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Indexes are unmanaged and an investor cannot invest directly in an index.

On September 6, 2018, the fund's underlying index changed from the Richard Bernstein Advisors Quality Income Index to the Dorsey Wright Momentum Plus Dividend Yield™ Index. Therefore, the fund's performance and historical returns shown for the periods prior to this date are not necessarily indicative of the performance that the fund, based on its current index, would have generated.

Dow Jones U.S. Select Dividend Index - The Index consists of 100 widely-traded, dividend-paying stocks derived from the Dow Jones U.S.Total Market IndexSM.

S&P 500® Index - The Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance.
Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares.
2 Fund shares are purchased and sold on an exchange at their market price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 The median bid-ask spread is calculated by identifying the national best bid and national best offer ("NBBO") for the fund as of the end of each 10 second interval during each trading day of the last 30 calendar days and dividing the difference between each such bid and offer by the midpoint of the NBBO. The median of those values is identified and that value is expressed as a percentage rounded to the nearest hundredth.
4
The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
5 Most recent distribution paid or declared to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
6 The 30-day SEC yield is calculated by dividing the net investment income per share earned during the most recent 30-day period by the maximum offering price per share on the last day of the period and includes the effects of fee waivers and expense reimbursements, if applicable.
7 12-Month Distribution Rate is calculated by dividing the sum of the fund's trailing 12-month ordinary distributions paid or declared by the NAV price. Distribution rates may vary.
8 Index yield represents the weighted average trailing 12-month dividend of the constituents of the Dorsey Wright Momentum Plus Dividend Yield(TM) Index.
9 All market capitalization numbers are in USD$ Millions.
10 Inception Date is 3/10/2014

You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or summary prospectus, or contact First Trust Portfolios L.P. at 1-800-621-1675 to request a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.

Risk Considerations

You could lose money by investing in a fund. An investment in a fund is not a deposit of a bank and is not insured or guaranteed. There can be no assurance that a fund's objective(s) will be achieved. Investors buying or selling shares on the secondary market may incur customary brokerage commissions. Please refer to each fund's prospectus and Statement of Additional Information for additional details on a fund's risks. The order of the below risk factors does not indicate the significance of any particular risk factor.

Unlike mutual funds, shares of the fund may only be redeemed directly from a fund by authorized participants in very large creation/redemption units. If a fund's authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a premium or discount to a fund's net asset value and possibly face delisting and the bid/ask spread may widen.

Current market conditions risk is the risk that a particular investment, or shares of the fund in general, may fall in value due to current market conditions. As a means to fight inflation, the Federal Reserve and certain foreign central banks have raised interest rates; however, the Federal Reserve has recently lowered interest rates and may continue to do so. Recent and potential future bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle East and the United States. The hostilities and sanctions resulting from those hostilities have and could continue to have a significant impact on certain fund investments as well as fund performance and liquidity. The COVID-19 global pandemic, or any future public health crisis, and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets, negatively impacting global growth prospects.

A fund is susceptible to operational risks through breaches in cyber security. Such events could cause a fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.

Companies that issue dividend-paying securities are not required to continue to pay dividends on such securities. Therefore, there is a possibility that such companies could reduce or eliminate the payment of dividends in the future.

Energy companies are subject to certain risks, including volatile fluctuations in price and supply of energy fuels, international politics, terrorist attacks, reduced demand, the success of exploration projects, natural disasters, clean-up and litigation costs relating to oil spills and environmental damage, and tax and other regulatory policies of various governments. Oil production and refining companies are subject to extensive federal, state and local environmental laws and regulations regarding air emissions and the disposal of hazardous materials and may be subject to tariffs. In addition, oil prices are generally subject to extreme volatility.

Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.

Financial services companies are subject to the adverse effects of economic recession, currency exchange rates, government regulation, decreases in the availability of capital, volatile interest rates, portfolio concentration in geographic markets, industries or products, and competition from new entrants in their fields of business.

An index fund will be concentrated in an industry or a group of industries to the extent that the index is so concentrated. A fund with significant exposure to a single asset class, or the securities of issuers within the same country, state, region, industry, or sector may have its value more affected by an adverse economic, business or political development than a broadly diversified fund.

A fund may be a constituent of one or more indices or models which could greatly affect a fund's trading activity, size and volatility.

There is no assurance that the index provider or its agents will compile or maintain the index accurately. Losses or costs associated with any index provider errors generally will be borne by a fund and its shareholders.

As inflation increases, the present value of a fund's assets and distributions may decline.

Market risk is the risk that a particular security, or shares of a fund in general may fall in value. Securities are subject to market fluctuations caused by such factors as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious disease or other public health issues, recessions, natural disasters or other events could have significant negative impact on a fund.

A fund faces numerous market trading risks, including the potential lack of an active market for fund shares due to a limited number of market makers. Decisions by market makers or authorized participants to reduce their role or step away in times of market stress could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying values of a fund's portfolio securities and a fund's market price.

A "momentum" style of investing emphasizes selecting stocks that have had higher recent price performance compared to other stocks. Momentum can turn quickly and cause significant variation from other types of investments.

An index fund's return may not match the return of the index for a number of reasons including operating expenses, costs of buying and selling securities to reflect changes in the index, and the fact that a fund's portfolio holdings may not exactly replicate the index.

A fund and a fund's advisor may seek to reduce various operational risks through controls and procedures, but it is not possible to completely protect against such risks. The fund also relies on third parties for a range of services, including custody, and any delay or failure related to those services may affect the fund's ability to meet its objective.

A fund that invests in securities included in or representative of an index will hold those securities regardless of investment merit and the fund generally will not take defensive positions in declining markets.

High portfolio turnover may result in higher levels of transaction costs and may generate greater tax liabilities for shareholders.

The market price of a fund's shares will generally fluctuate in accordance with changes in the fund's net asset value ("NAV") as well as the relative supply of and demand for shares on the exchange, and a fund's investment advisor cannot predict whether shares will trade below, at or above their NAV.

The risks associated with investing in real estate companies may be similar to those associated with direct ownership of real estate and include fluctuations in the value of underlying properties, defaults by borrowers or tenants, market saturation, changes in general and local economic conditions, decreases in market rates for rents, increases in competition, property taxes, capital expenditures or operating expenses, dependency upon management skills, limited diversification, and other economic, political or regulatory occurrences.

Real Estate Investment Trusts ("REITs") are subject to the risks of investing in real estate, including, but not limited to, changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession. Increases in interest rates typically lower the present value of a REIT's future earnings stream and may make financing property purchases and improvements more costly. The value of a fund will generally decline when investors in REIT stocks anticipate or experience rising interest rates.

Securities of small- and mid-capitalization companies may experience greater price volatility and be less liquid than larger, more established companies.

Trading on an exchange may be halted due to market conditions or other reasons. There can be no assurance that a fund's requirements to maintain the exchange listing will continue to be met or be unchanged.

First Trust Advisors L.P. (FTA) is the adviser to the First Trust fund(s). FTA is an affiliate of First Trust Portfolios L.P., the distributor of the fund(s).

Nasdaq® and Dorsey Wright Momentum Plus Dividend Yield™ Index are registered trademarks and service marks of Nasdaq, Inc. (together with its affiliates hereinafter referred to as the "Corporations") and are licensed for use by First Trust. The Fund has not been passed on by the Corporations as to its legality or suitability. The Fund is not issued, endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.

©2024 Morningstar, Inc. All Rights Reserved. The Morningstar RatingTM information contained herein: (1) is proprietary to Morningstar;(2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

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Not FDIC Insured • Not Bank Guaranteed • May Lose Value