Is First Trust Dow 30 Equal Weight ETF (EDOW) a Strong ETF Right Now?

The First Trust Dow 30 Equal Weight ETF (EDOW) was launched on 08/08/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend category of the market.

What Are Smart Beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

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.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

EDOW is managed by First Trust Advisors, and this fund has amassed over $217.92 million, which makes 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

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Operating expenses on an annual basis are 0.50% for this ETF, which makes it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.41%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 20.7% of the portfolio. Financials and Consumer Discretionary round out the top three.

Story ContinuesLooking at individual holdings, Nike, Inc. (class B) (NKE) accounts for about 3.86% of total assets, followed by The Goldman Sachs Group, Inc. (GS) and Nvidia Corporation (NVDA).

The top 10 holdings account for about 35.29% of total assets under management.

Performance and Risk

So far this year, EDOW has added roughly 6.75%, and is up roughly 16.88% in the last one year (as of 08/12/2025). During this past 52-week period, the fund has traded between $32.19 and $39.21.

The ETF has a beta of 0.90 and standard deviation of 14.37% 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 $651.18 billion in assets, Vanguard S&P 500 ETF has $715.48 billion. SPY has an expense ratio of 0.09% 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

First Trust Dow 30 Equal Weight ETF (EDOW): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments