The First Trust Dow 30 Equal Weight ETF (EDOW) made its debut on 08/08/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by First Trust Advisors, EDOW has amassed assets over $205.54 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. EDOW seeks to match the performance of the Dow Jones Industrial Average Equal Weight Index before fees and expenses.
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 Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for EDOW are 0.50%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.75%.
Sector Exposure and Top Holdings
ETFs 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.
For EDOW, it has heaviest allocation in the Information Technology sector --about 18.90% of the portfolio --while Financials and Healthcare round out the top three.
When you look at individual holdings, Amgen Inc. (AMGN) accounts for about 3.88% of the fund's total assets, followed by 3m Company (MMM) and Johnson & Johnson (JNJ).
The top 10 holdings account for about 36.77% of total assets under management.
Performance and Risk
The ETF has lost about -6.48% so far this year and is up roughly 2.91% in the last one year (as of 04/11/2025). In the past 52-week period, it has traded between $32.19 and $38.24.
The ETF has a beta of 0.89 and standard deviation of 15.31% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Dow 30 Equal Weight ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
SPDR S&P 500 ETF (SPY) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO) tracks S&P 500 Index. SPDR S&P 500 ETF has $541.56 billion in assets, Vanguard S&P 500 ETF has $548.46 billion. SPY has an expense ratio of 0.09% and VOO charges 0.03%.
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 Line
To 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.
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First Trust Dow 30 Equal Weight ETF (EDOW): ETF Research Reports Johnson & Johnson (JNJ): Free Stock Analysis Report Amgen Inc. (AMGN): Free Stock Analysis Report 3M Company (MMM): Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports Vanguard S&P 500 ETF (VOO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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