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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by First Trust Advisors, EDOW has amassed assets over $295.37 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the Dow Jones Industrial Average Equal Weight Index.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.50%.
It's 12-month trailing dividend yield comes in at 1.25%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 16.8% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Merck & Co., Inc. (MRK) accounts for about 3.93% of total assets, followed by Honeywell International Inc. (HON) and The Boeing Company (BA).
The top 10 holdings account for about 37.45% of total assets under management.
Performance and Risk
The ETF has added about 4.67% and is up roughly 14.91% so far this year and in the past one year (as of 02/19/2026), respectively. EDOW has traded between $32.19 and $43.67 during this last 52-week period.
The ETF has a beta of 0.87 and standard deviation of 12.64% 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.
iShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO) tracks S&P 500 Index. iShares Core S&P 500 ETF has $754.72 billion in assets, Vanguard S&P 500 ETF has $854.53 billion. IVV has an expense ratio of 0.03% and VOO changes 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 ReportsThis article originally published on Zacks Investment Research (zacks.com).
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