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First Trust Dow Jones Select MicroCap Index Fund (FDM)
Investment Objective/Strategy - The First Trust Dow Jones Select MicroCap Index Fund is an exchange-traded index fund. The investment objective of the Fund is to replicate as closely as possible, before fees and expenses, the price and yield of the Dow Jones Select Microcap IndexSM.
There can be no assurance that the Fund's investment objectives will be achieved.
  • This index is designed to represent microcap stocks trading on the New York Stock Exchange ("NYSE"), NYSE Amex and Nasdaq that are comparatively liquid and have strong fundamentals relative to the microcap segment as a whole.
  • Covers securities whose market capitalizations fall within a range defined by the bottom two deciles of NYSE stocks.
  • Stocks are screened based on market capitalization, trading volume, and financial indicators that include trailing price/earnings ratio, trailing price/sales ratio, per-share profit change for the previous quarter, operating profit margin and six-month total return.
Fund Overview
TickerFDM
Fund TypeMicro Cap
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
CUSIP33718M105
Intraday NAVFDMIV
Fiscal Year-End12/31
ExchangeNYSE Arca
Inception9/27/2005
Inception Price$20.00
Inception NAV$20.00
Rebalance FrequencyQuarterly
Gross Expense Ratio*0.72%
Net Expense Ratio*0.60%
* As of 12/31/2013
Expenses are capped contractually at 0.60% per year, at least until April 30, 2015.
Current Fund Data (as of 7/24/2014)
Closing NAV1$31.37
Closing Share Price2$31.32
Bid/Ask Midpoint$31.36
Bid/Ask Discount0.04%
Total Net Assets$61,325,647
Outstanding Shares1,955,000
Daily Volume3,839
Average 30-Day Daily Volume5,914
Closing Share Price 52-Week High/Low$33.07 / $27.29
Closing NAV 52-Week High/Low$33.05 / $27.23
Number of Holdings237
Fund Characteristics (as of 6/30/2014)7
Median Market Cap.$499
Maximum Market Cap.$1,810
Minimum Market Cap.$13
Price/Earnings18.49
Price/Book1.87
Price/Cash Flow8.59
Price/Sales0.91
Top Holdings (as of 7/24/2014)
Holding Percent
Gentherm Inc. 1.61%
The Greenbrier Companies, Inc. 1.52%
South State Corporation 1.35%
Union Bankshares Corp. 1.08%
Altra Industrial Motion Corp. 0.94%
US Ecology, Inc. 0.91%
Sterling Bancorp (Delaware) 0.90%
Renasant Corporation 0.88%
Federal Signal Corporation 0.86%
Neenah Paper, Inc. 0.82%

Holdings are subject to change.

Bid/Ask Midpoint and NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt3$0.0717
30-Day SEC Yield (as of 6/30/2014)40.70%
12-Month Distribution Rate (as of 6/30/2014)50.94%
Index Yield (as of 6/30/2014)61.35%
Bid/Ask Midpoint vs. NAV (as of 6/30/2014)
Number of Days Bid/Ask Midpoint Above NAV
Quarter Ended 0-49
Basis Points
50-99
Basis Points
100-199
Basis Points
>=200
Basis Points
6/30/2014 23 1 0 0
3/31/2014 21 0 0 0
12/31/2013 43 0 0 0
9/30/2013 39 0 0 0
Number of Days Bid/Ask Midpoint Below NAV
Quarter Ended 0-49
Basis Points
50-99
Basis Points
100-199
Basis Points
>=200
Basis Points
6/30/2014 39 0 0 0
3/31/2014 40 0 0 0
12/31/2013 20 1 0 0
9/30/2013 25 0 0 0

The price used to calculate market return is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange, on which shares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated.

Top Sector Exposure (as of 7/24/2014)
Financials 25.06%
Industrials 23.57%
Consumer Discretionary 14.61%
Information Technology 9.55%
Health Care 9.53%
Energy 4.30%
Materials 4.06%
Telecommunication Services 4.02%
Consumer Staples 3.25%
Utilities 2.05%
Month End Performance (as of 6/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV -0.55% -0.67% 22.47% 13.37% 18.51% N/A 6.40%
After Tax Held -0.65% -0.86% 21.96% 12.84% 18.11% N/A 6.09%
After Tax Sold -0.31% -0.38% 12.71% 10.21% 14.88% N/A 4.96%
Market Price -0.58% -0.21% 22.85% 13.41% 18.47% N/A 6.40%
Index Performance **
Dow Jones Select MicroCap IndexSM -0.39% -0.36% 23.28% 14.09% 19.31% N/A 7.14%
Russell 2000® Index 2.05% 3.19% 23.64% 14.57% 20.21% N/A 8.47%
Quarter End Performance (as of 6/30/2014)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception8
Fund Performance *
NAV -0.55% -0.67% 22.47% 13.37% 18.51% N/A 6.40%
After Tax Held -0.65% -0.86% 21.96% 12.84% 18.11% N/A 6.09%
After Tax Sold -0.31% -0.38% 12.71% 10.21% 14.88% N/A 4.96%
Market Price -0.58% -0.21% 22.85% 13.41% 18.47% N/A 6.40%
Index Performance **
Dow Jones Select MicroCap IndexSM -0.39% -0.36% 23.28% 14.09% 19.31% N/A 7.14%
Russell 2000® Index 2.05% 3.19% 23.64% 14.57% 20.21% N/A 8.47%
3-Year Statistics (as of 6/30/2014)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FDM 19.16% -2.11 1.10 0.73 0.97
Russell 2000® Index 16.98% --- 1.00 0.86 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 based on the midpoint of the bid/ask spread. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. The fund's performance reflects fee waivers and expense reimbursements, absent which performance would have been lower.

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 the Dow Jones Select MicroCap IndexSM is for illustrative purposes only and does not represent actual fund performance. The Index does 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.

The gross expense ratio for this fund is 0.72%. Expenses are capped contractually at 0.60% per year, at least until April 30, 2015.

The Russell 2000® Index is comprised of the smallest 2000 companies in the Russell 3000 Index.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's shares outstanding.
2 Fund shares are purchased and sold on an exchange at their share 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 Most recent distribution paid or declared through today's date. Subject to change in the future.
4 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.
5 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.
6 Index yield represents the weighted average trailing 12-month dividend of the constituents of the Dow Jones Select MicroCap Index(SM)
7 All market capitalization numbers are in USD$ Millions.
8 Inception Date is 9/27/2005
Downloads and Links to Recently Posted Fund Information

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.

ETF Characteristics

The fund lists and principally trades its shares on the NYSE Arca, Inc.

The fund's return may not match the return of the Dow Jones Select MicroCap IndexSM.  Securities held by the fund will generally not be bought or sold in response to market fluctuations.

The fund may not be fully invested at times. Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Market prices may differ to some degree from the net asset value of the shares. Investors who sell fund shares may receive less than the share's net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, unlike mutual funds, shares may only be redeemed directly from the fund by authorized participants, in very large creation/redemption units.

Risk Considerations

The fund's shares will change in value, and you could lose money by investing in the fund. One of the principal risks of investing in the fund is market risk. Market risk is the risk that a particular stock owned by the fund, fund shares or stocks in general may fall in value.

The fund may invest in securities may be issued by companies concentrated in a particular industry. The fund will invest in micro-capitalization companies. Such companies may be more vulnerable to adverse general market or economic developments, may be less liquid, and may experience greater price volatility than larger, more established companies.

The Dow Jones Select MicroCap IndexSM, is a product of Dow Jones Indexes, a licensed trademark of CME Group Index Services LLC ("CME"), and has been licensed for use. "Dow Jones®", "Dow Jones Select MicroCap IndexSM", and "Dow Jones Indexes" are service marks of Dow Jones Trademark Holdings, LLC ("Dow Jones"), and have been licensed to CME and have been sublicensed for use for certain purposes by First Trust. First Trust's ETF, based on the Dow Jones Select MicroCap IndexSM, is not sponsored, endorsed, sold or promoted by Dow Jones, CME or their respective affiliates and none of them makes any representation regarding the advisability of investing in such products.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
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