4 min readBy Ron Koren ETF Insider
How does the DVLU ETF work?
The DVLU ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The DVLU issuer, managed by First Trust Advisors L.P., primarily invests in securities that constitute the Index, aiming to replicate its performance before fees and expenses. Developed by Nasdaq, Inc., the Index focuses on the 50 most undervalued stocks within the Nasdaq US Large Mid CapTMIndex, employing a relative strength analysis to identify securities with high forward price momentum. This momentum-based strategy compares each security's price momentum against a broad market benchmark index on a daily basis, utilizing point and figure charting to signal buy or sell opportunities. Eligible securities undergo ranking based on four value metrics, with the top 50 selected for inclusion in the Index and weighted according to their value scores. The Index undergoes quarterly rebalancing, leading to potential higher portfolio turnover for the Fund. As of December 31, 2023, the Fund had notable investments in consumer discretionary and financial companies, though its sector exposure may vary over time, potentially exposing the Fund to associated risks.
DVLU Dividend, overseen by First Trust Advisors L.P., follows an investment strategy where at least 90% of its net assets are allocated to securities comprising the designated Index, as developed by Nasdaq, Inc. This approach aims to mirror the Index's performance before accounting for fees and expenses. The Index selects the 50 most undervalued stocks within the Nasdaq US Large Mid CapTMIndex, using a relative strength analysis to identify securities demonstrating robust forward price momentum. These securities are then subjected to a rigorous evaluation based on four key value metrics, with the top 50 scoring highest in value selected for inclusion in the Index. Weightings within the Index are determined based on each security's value scores, akin to a market cap weighting methodology. The Fund adheres to a quarterly rebalancing schedule in line with changes to the Index, which may result in increased portfolio turnover. Notably, as of December 31, 2023, the Fund had significant investments in consumer discretionary and financial companies, but its sector allocations may evolve over time, potentially exposing the Fund to sector-specific risks.
DVLU Tracking, managed by First Trust Advisors L.P., adopts an indexing investment approach, with the aim of replicating the performance of the designated Index, which was developed and is owned by Nasdaq, Inc. This strategy entails investing at least 90% of its net assets in securities that constitute the Index, striving to match its performance before fees and expenses. The Index methodology revolves around selecting the 50 most undervalued stocks within the Nasdaq US Large Mid CapTMIndex, employing a relative strength analysis to identify securities exhibiting strong forward price momentum. To ensure the integrity of the Index, Nasdaq, Inc. exercises discretion in maintaining its quality, including potential discretionary adjustments under special circumstances. Eligible securities are ranked based on four value metrics, with the top 50 scoring highest in value selected for inclusion in the Index and weighted accordingly. The Fund's portfolio undergoes quarterly rebalancing in alignment with changes to the Index, which may lead to increased portfolio turnover. As of December 31, 2023, the Fund had notable investments in consumer discretionary and financial companies, though its sector exposures may vary over time, potentially exposing the Fund to associated risks.
DVLU Correlation, under the management of First Trust Advisors L.P., implements an indexing investment strategy with the primary goal of replicating the performance of the designated Index, which is owned and developed by Nasdaq, Inc. The Index methodology focuses on selecting the 50 most undervalued stocks within the Nasdaq US Large Mid CapTMIndex, utilizing a relative strength analysis to identify securities with robust forward price momentum. To maintain the integrity of the Index, Nasdaq, Inc. exercises discretion, including potential discretionary adjustments when necessary. Eligible securities undergo ranking based on four value metrics, with the top 50 scoring highest in value selected for inclusion and weighted accordingly. The Fund's portfolio undergoes quarterly rebalancing to align with changes in the Index composition, which may lead to increased portfolio turnover. As of December 31, 2023, the Fund had notable investments in consumer discretionary and financial sectors, though its sector exposures may vary over time, potentially exposing the Fund to sector-specific risks. Overall, DVLU Correlation aims to closely track the performance of the designated Index, maintaining a strong correlation with its underlying securities.
DVLU Sector, managed by First Trust Advisors L.P., employs an indexing investment approach with the primary objective of mirroring the performance of the designated Index, developed and owned by Nasdaq, Inc. The Index methodology focuses on selecting the 50 most undervalued stocks within the Nasdaq US Large Mid CapTMIndex, utilizing a relative strength analysis to identify securities with robust forward price momentum. To uphold the Index's integrity, Nasdaq, Inc. may exercise discretion, including potential discretionary adjustments as needed. Eligible securities are ranked based on four value metrics, with the top 50 scoring highest in value selected for inclusion and weighted accordingly. The Fund's portfolio undergoes quarterly rebalancing to align with changes in the Index composition, potentially leading to increased portfolio turnover. As of December 31, 2023, the Fund had significant investments in consumer discretionary and financial sectors, though its sector allocations may vary over time, potentially exposing the Fund to sector-specific risks. Overall, DVLU Sector aims to closely track the performance of the designated Index while maintaining exposure to various sectors within the market.
DVLU Exposure, managed by First Trust Advisors L.P., implements an indexing investment strategy aimed at replicating the performance of the designated Index, developed and owned by Nasdaq, Inc. The Index methodology concentrates on selecting the 50 most undervalued stocks within the Nasdaq US Large Mid CapTMIndex, utilizing a relative strength analysis to identify securities demonstrating robust forward price momentum. To preserve the Index's integrity, Nasdaq, Inc. retains the discretion to make adjustments as needed. Eligible securities undergo ranking based on four value metrics, with the top 50 scoring highest in value selected for inclusion and weighted accordingly. The Fund's portfolio experiences quarterly rebalancing to synchronize with changes in the Index composition, potentially leading to increased turnover. As of December 31, 2023, the Fund had notable exposure to consumer discretionary and financial sectors, although sector allocations may fluctuate over time, exposing the Fund to sector-specific risks. DVLU Exposure aims to provide investors with exposure to a diversified selection of undervalued stocks while closely tracking the performance of the designated Index.
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