Is First Trust Dow 30 Equal Weight ETF (EDOW) a Strong ETF Right Now?

A smart beta exchange traded fund, the First Trust Dow 30 Equal Weight ETF (EDOW) debuted on 08/08/2017, and offers broad exposure to the Style Box - Large Cap Blend category of the market.What Are Smart Beta ETFs?The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.Fund Sponsor & IndexEDOW is managed by First Trust Advisors, and this fund has amassed over $230.38 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. EDOW, before fees and expenses, seeks to match the performance of the Dow Jones Industrial Average Equal Weight Index.The Dow Jones Industrial Average Equal Weight Index is an equally weighted index designed to be a price neutral version of the price-weighted DJIA.Cost & Other ExpensesCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.Annual operating expenses for this ETF are 0.50%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 1.73%.Sector Exposure and Top HoldingsETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.This ETF has heaviest allocation in the Information Technology sector - about 21.20% of the portfolio. Financials and Industrials round out the top three.Looking at individual holdings, Intel Corporation (INTC) accounts for about 3.86% of total assets, followed by Salesforce, Inc. (CRM) and Cisco Systems, Inc. (CSCO).EDOW's top 10 holdings account for about 35.96% of its total assets under management.Performance and RiskThe ETF return is roughly 17.36% so far this year and is up about 22.56% in the last one year (as of 12/04/2024). In the past 52-week period, it has traded between $31.18 and $38.01.The ETF has a beta of 0.91 and standard deviation of 14.36% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.AlternativesFirst Trust Dow 30 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.IShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY) tracks S&P 500 Index. IShares Core S&P 500 ETF has $578.51 billion in assets, SPDR S&P 500 ETF has $629.35 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Trust Dow 30 Equal Weight ETF (EDOW): ETF Research Reports Intel Corporation (INTC): Free Stock Analysis Report Salesforce Inc. (CRM): Free Stock Analysis Report Cisco Systems, Inc. (CSCO): Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks