WHEATON, Ill.--(BUSINESS WIRE)--First Trust Advisors L.P. (“First Trust”), a leading exchange-traded fund (“ETF”) provider and asset manager, announced today that it has launched a new index-based ETF, the First Trust Dow 30 Equal Weight ETF (NYSE Arca: EDOW) (the “fund”). The fund seeks investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the Dow Jones Industrial Average® Equal Weight Index (the “DJIA Equal Weight Index”). The DJIA Equal Weight Index is an equal-weight version of the Dow Jones Industrial Average® (“DJIA”).
“The Dow Jones Industrial Average® has been an important barometer for blue-chip US stocks,” said Ryan Issakainen, CFA, Senior Vice President, Exchange-Traded Fund Strategist at First Trust. The DJIA is a price-weighted index, comprised of 30 well-known, mega-cap companies. In contrast, the DJIA Equal Weight Index gives the same weight to each of the 30 constituents, allowing all companies to contribute equally, regardless of their price, which we believe may significantly reduce stock specific risk relative to price weighting. “We believe that the equally weighted version of this index is a noteworthy enhancement for ETF investors, in comparison to the traditional price-weighted version of the index,” Issakainen said.
S&P Dow Jones Indices expressed a similar sentiment; “We are excited to license the Dow Jones Industrial Average® Equal Weight Index to First Trust Advisors,” said Joe Kairen, Senior Director, Strategy Indices at S&P Dow Jones Indices. “The equal-weighted design of the index allows for each of the 30 companies in the Dow Jones Industrial Average®, an iconic indicator of investor sentiment for more than 120 years, to have the same effect on its performance.”
For more information about First Trust, please contact Ryan Issakainen at (630) 765-8689 or RIssakainen@FTAdvisors.com.
About First Trust
First Trust Advisors L.P., along with its affiliate First Trust Portfolios L.P., are privately held companies which provide a variety of investment services, including asset management and financial advisory services, with collective assets under management or supervision of approximately $109 billion as of July 31, 2017, through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds, variable annuities and separately managed accounts. First Trust is based in Wheaton, Illinois. For more information, visit http://www.ftportfolios.com.
You should consider the fund’s investment objectives, risks, and charges and expenses carefully before investing. Contact First Trust Portfolios L.P. at 1-800-621-1675 to obtain 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 Industrial Average® Equal Weight Index. Securities held by the fund will generally be bought or sold in response to market fluctuations.
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. If the fund's authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a discount to the fund's net asset value and possibly face delisting.
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. There can be no assurance that the fund's investment objective will be achieved.
The fund may invest in securities issued by companies concentrated in a particular industry which involves additional risks including limited diversification.
The fund currently has fewer assets than larger funds, and like other relatively new funds, large inflows and outflows may impact the fund's market exposure for limited periods of time.
As the use of Internet technology has become more prevalent in the course of business, the fund has become more susceptible to potential operational risks through breaches in cyber security. Such events could cause the fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.
The fund is classified as "non-diversified" and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA and the Internal Revenue Code. First Trust has no knowledge of and has not been provided any information regarding any investor. Financial advisors must determine whether particular investments are appropriate for their clients. First Trust believes the financial advisor is a fiduciary, is capable of evaluating investment risks independently and is responsible for exercising independent judgment with respect to its retirement plan clients.
First Trust Advisors L.P. is the adviser to the fund. First Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P., the fund’s distributor.
The S&P Index(es) (the “Index(es)”) underlying the product provider’s (the “Issuer”) investment products (the “Investment Products”) are proprietary to S&P Dow Jones Indices LLC (“S&P DJI”). S&P® and the names identifying the Index(es) are trademarks of Standard & Poor’s Financial Services LLC and have been licensed for use by S&P DJI and sublicensed for certain purposes by the Issuer. The Issuer’s Investment Products based on the Index(es) are not in any way sponsored, endorsed, sold or promoted by S&P DJI, its affiliates or licensors and those parties make no representations or warranties, express or implied, regarding the advisability of investing in securities generally or in the Investment Products particularly or the ability of the Index(es) to track general market performance.
The “Dow Jones Industrial Average® Equal Weight Index” is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by First Trust. Dow Jones® and “Dow Jones Industrial Average® Equal Weight” are trademarks of Dow Jones Trademark Holdings LLC (“Dow Jones”); and have been licensed to SPDJI and have been sublicensed for use for certain purposes by First Trust on behalf of the fund. The First Trust Dow 30 Equal Weight Index Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones or their respective affiliates and none of them makes any representation regarding the advisability of investing in such product.
