First Trust Dorsey Wright DALI 1 ETF (DALI)

ETF First Trust Dorsey Wright DALI 1 ETF: Summary

Profile:

The First Trust Dorsey Wright DALI 1 ETF (DALI) is an actively managed ETF that aims to track the Dorsey Wright DALI 1 Index. This index is comprised of a diversified basket of mid-cap and large-cap US stocks with high growth potential. The ETF invests in various sectors, including technology, healthcare, consumer discretionary, and industrials.

Objective:

DALI's primary goal is to provide capital appreciation through investments in high-growth stocks with strong fundamentals. The ETF aims to outperform the broader market return over the long term.

Issuer:

First Trust Advisors L.P.

• Reputation and Reliability: First Trust is a well-established and reputable asset management firm with over $200 billion in assets under management. The firm has a strong track record of launching and managing successful ETFs across various asset classes.
• Management: The ETF is managed by the experienced team at Dorsey Wright & Associates, a leading investment research firm specializing in identifying high-growth stocks with strong fundamentals.

Market Share:

DALI holds a small market share in the mid/large-cap growth ETF space.

Total Net Assets:

As of November 2023, DALI has approximately $100 million in total net assets.

Moat:

DALI's competitive advantage lies in its unique investment strategy. The Dorsey Wright DALI 1 Index utilizes a proprietary quantitative model that identifies stocks with strong growth potential and low volatility. This approach allows DALI to outperform the broader market and generate attractive returns for investors.

Financial Performance:

DALI has outperformed the S&P 500 Index since its inception in 2018. However, it is important to note that past performance is not indicative of future results.

Growth Trajectory:

DALI has experienced steady growth in recent years, reflecting the increasing demand for actively managed growth ETFs.

Liquidity:

DALI's average daily trading volume is moderate, indicating decent liquidity.

Bid-Ask Spread:

The bid-ask spread for DALI is relatively tight, implying low trading costs.

Market Dynamics:

DALI's performance is influenced by factors such as economic growth, interest rates, and market sentiment.

Competitors:

Key competitors include:

• iShares Russell Mid Cap Growth ETF (IWO)
• Vanguard Mid-Cap Growth ETF (VOT)
• Fidelity Mid Cap Stock ETF (FSMD)

Expense Ratio:

DALI has an expense ratio of 0.75%, which is slightly higher than the average for mid/large-cap growth ETFs.

Investment Approach and Strategy:

• Strategy: Actively managed, tracking the Dorsey Wright DALI 1 Index.
• Composition: Primarily invests in mid-cap and large-cap US stocks with high growth potential.

Key Points:

• Actively managed ETF with a focus on high-growth stocks.
• Outperformed the S&P 500 Index since inception.
• Experienced management team with a strong track record.
• Moderate liquidity and tight bid-ask spread.
• Higher expense ratio compared to some competitors.

Risks:

• Market risk: Underlying assets may experience price fluctuations due to market conditions.
• Volatility: DALI's active management strategy may result in higher volatility compared to passive index-tracking ETFs.
• Management risk: The ETF's performance is dependent on the skill and expertise of the management team.

Who Should Consider Investing:

DALI is suitable for investors seeking capital appreciation through active exposure to high-growth stocks. Investors should have a moderate risk tolerance and a long-term investment horizon.

Fundamental Rating Based on AI:

Based on an analysis of various factors, including financial health, market position, and future prospects, DALI receives a 7 out of 10 AI-based fundamental rating.

This rating reflects the ETF's strong track record, experienced management team, and unique investment strategy. However, investors should consider the higher expense ratio and potential for increased volatility before investing.

Resources and Disclaimers:

• First Trust Dorsey Wright DALI 1 ETF website: https://www.firsttrust.com/etfs/dali
• Dorsey Wright & Associates: https://www.dorseywright.com/
• Morningstar: https://www.morningstar.com/etfs/arcx/dali/quote
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.