First Trust Dorsey Wright DALI 1 ETF (DALI)DALI

ETF First Trust Dorsey Wright DALI 1 ETF (DALI)

Profile:

DALI is an actively managed ETF that seeks to achieve long-term capital appreciation by using a quantitative model to identify companies with strong potential for sustainable growth and consistent profitability. It invests primarily in large- and mid-cap U.S. stocks across all sectors.

Objective:

The primary objective of DALI is to outperform the S&P 500 Index over the long term.

Issuer:

First Trust Advisors L.P. is a leading provider of exchange-traded funds (ETFs) with over $164 billion in assets under management. The company is known for its innovative and actively managed ETF strategies.

Reputation and Reliability:

First Trust has a strong reputation in the ETF industry, with a long track record of success.

Management:

The DALI portfolio is managed by Dorsey Wright & Associates, a quantitative investment firm with over 40 years of experience. The firm's investment process is based on extensive research and data analysis.

Market Share:

DALI has a relatively small market share of approximately 0.03% within the large-cap growth ETF category.

Total Net Assets:

As of November 10, 2023, DALI has total net assets of $207.2 million.

Moat:

DALI's competitive advantages include:

• Unique investment strategy: The Dorsey Wright quantitative model identifies companies with strong fundamentals and earnings growth potential.
• Experienced management team: Dorsey Wright has a proven track record in managing quantitative investment strategies.
• Active management: DALI is actively managed, which allows the portfolio managers to adjust holdings based on market conditions.

Financial Performance:

Historical Performance:

• Since Inception (11/30/2017): 12.2% annualized return
• 1 Year: 4.4%
• 3 Years: 6.9%
• 5 Years: 11.4%

Benchmark Comparison:

DALI has outperformed the S&P 500 Index in each of the past 1, 3, and 5 years.

Growth Trajectory:

DALI has experienced steady growth in assets under management since its inception. The long-term growth trajectory of the ETF will depend on the continued performance of the Dorsey Wright quantitative model and market conditions.

Liquidity:

• Average Trading Volume: 20,000 shares per day
• Bid-Ask Spread: 0.03%

Market Dynamics:

DALI's market performance is influenced by several factors, including economic growth, interest rates, and sector performance. The ETF is also impacted by changes in investor sentiment and market volatility.

Competitors:

• iShares Russell 1000 Growth ETF (IWF) - 23.4% market share
• Vanguard Growth ETF (VUG) - 20.5% market share
• Invesco S&P 500 Growth ETF (SPYG) - 13.7% market share

Expense Ratio:

DALI has an expense ratio of 0.65%.

Investment Approach and Strategy:

• Strategy: Actively managed, quantitative stock selection model.
• Composition: Primarily large- and mid-cap U.S. stocks across all sectors.

Key Points:

• Actively managed
• Focus on sustainable growth and consistent profitability
• Strong historical performance
• Outperformed the S&P 500 Index
• Relatively small market share
• High expense ratio

Risks:

• Market risk: DALI is subject to market risk, meaning the value of its holdings can fluctuate due to changes in market conditions.
• Volatility: DALI may experience higher volatility than the broader market due to its focus on growth stocks.
• Active management risk: The success of DALI depends on the effectiveness of the Dorsey Wright quantitative model and the skill of the portfolio managers.

Who Should Consider Investing:

DALI is suitable for investors:

• Seeking long-term capital appreciation
• Comfortable with a higher level of risk
• Believe in the Dorsey Wright quantitative model
• Have 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 7/10 fundamental rating.

The analysis highlights the ETF's strong historical performance, experienced management team, and unique investment strategy. However, the high expense ratio and relatively small market share are considered negatives.

This is just an example of a fundamental rating, and investors should conduct their own research before making investment decisions.

Resources and Disclaimers:

• First Trust Dorsey Wright DALI 1 ETF website: https://www.firsttrust.com/etf/dali
• Morningstar: https://www.morningstar.com/etfs/arcx/dali
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. It is essential to conduct thorough research and consult with a financial professional before making any investment decisions.