Should First Trust Dow Jones Select MicroCap ETF (FDM) Be on Your Investing Radar?
The First Trust Dow Jones Select MicroCap ETF (FDM) was launched on September 27, 2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
Should First Trust Dow Jones Select MicroCap ETF (FDM) Be on Your Investing Radar?
If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the First Trust Dow Jones Select MicroCap ETF (FDM), a passively managed exchange traded fund launched on September 27, 2005.
FDM: Micro-Cap ETF With Sound Fundamentals, But High Sector Risk
The First Trust Dow Jones Select MicroCap Index Fund ETF offers diversified micro-cap exposure with 150 stocks, low company risk, and a 0.60% expense ratio. FDM features strong value characteristics versus the small-cap benchmark IWM but carries significant sector risk in financials. FDM's historical returns closely match IWM and outperform key competitor IWC long-term, yet have lagged IWC over the past year.
Should First Trust Dow Jones Select MicroCap ETF (FDM) Be on Your Investing Radar?
If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the First Trust Dow Jones Select MicroCap ETF (FDM), a passively managed exchange traded fund launched on September 27, 2005.
Should First Trust Dow Jones Select MicroCap ETF (FDM) Be on Your Investing Radar?
Launched on September 27, 2005, the First Trust Dow Jones Select MicroCap ETF (FDM) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
Should First Trust Dow Jones Select MicroCap ETF (FDM) Be on Your Investing Radar?
Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the First Trust Dow Jones Select MicroCap ETF (FDM) is a passively managed exchange traded fund launched on September 27, 2005.
FDM: Be Cautious About This High-Risk, Low-Reward Micro-Cap Play
FDM might lure investors with its 5.8% earnings yield, something that is quite complicated to find in today's high-priced market fluctuating around record highs. However, the reality of micro-cap investing is that large value exposure, sadly, translates into high-risk and low reward. This is the main consequence of the universe having inadequate quality. While FDM does address the quality issue in a diligent manner, which secured outperformance over its peer IWC since its inception, it has significantly underperformed IVV and IJR.
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FDM: Quality Screens A Success For This Long-Running Micro-Cap ETF
FDM tracks the Dow Jones Select Microcap Index, selecting about 150 micro-cap stocks after applying profitability and value screens. Expenses are 0.60% and the ETF has $181 million in assets. These screens have proved valuable over the long run. Since 2005, it has outperformed the more popular and better diversified IWC with less risk. I expect this trend to continue. My analysis reveals FDM is superior on risk management, value, and quality, with a slight weakness on growth. Ultimately, it looks better prepared for multiple market conditions.
