ETF Research Center

The First Trust Dorsey Wright Momentum & Dividend ETF (formerly the First Trust RBA Quality Income ETF) tracks the Dorsey Wright Momentum Plus Dividend Yield Index, a rules-based equity index which holds the 50 highest dividend yielding stocks within the NASDAQ US Large Mid Cap Index that maintain high levels of relative strength.

FUND BASICS
Category	US Equities
Fund Sponsor	First Trust Advisors LP
Website	www.ftportfolios.com
Inception date	Mar 11, 2014
Assets (mns)	$54
Currency	USD
Expense ratio	60 bp
Distributions	Quarterly

FUND STRUCTURE
Regulation	Open-End Investment Company
Custodian	Brown Brothers Harriman & Co
Weighting	Proprietary
Index replication	Optimized
Uses derivatives	No
Options available	No

SECTOR BREAKDOWN

CONSTITUENT BREAKDOWN
No. of constituents	50
Wgt avg mkt cap (mns)	$28,350
Large cap (>$10bn)	48.5%
Mid cap ($2-10bn)	51.6%
Small cap (<$2bn)	0.0%
Developed mkts	100.0%
Emerging mkts	0.0%

TOP TEN HOLDINGS
Total	33.6 %
CAPITAL TRUST-CL A	4.2 %
SPIRIT REALTY CAPITAL INC	3.5 %
SEAGATE TECHNOLOGY	3.4 %
MEDICAL PROPERTIES TRUST INC	3.4 %
ONEOK INC	3.4 %
BLACKSTONE GROUP LP/THE	3.3 %
LAMAR ADVERTISING COMPANY CLASS A	3.2 %
RYMAN HOSPITALITY PROPERTIES	3.2 %
WYNDHAM WORLDWIDE CORP	3.0 %
BROADCOM INC.	2.9 %

TOP COUNTRY EXPOSURE
	UNITED STATES	95.6 %
	IRELAND	3.4 %
	SWITZERLAND	1.0 %

HISTORICAL PERFORMANCE info

	Custom date range	Compare to
	thru

Standardized Annual Returns (thru October 31)
Year-to-date	1 year	5 years	10 years	Since Incep.
29.2%	14.9%	7.1%	--	7.4%

Market Correlations
versus...	Beta	R-squared
S&P500	0.82	67%
MSCI EAFE	0.68	40%
MSCI Emg. Mkts.	0.38	20%

Technical Indicators
Recent close	$26.22
30d moving avg.	$26.17
Annualized volatility	12.0%
Short interest (ETF)	1.9%
Short interest (Underlying)	4.8%
Relative strength (RSI)	63

Liquidity measures
Avg. volume (thou.)	23
Turnover	1.1%
Bid/Ask (% of price)	0.13%
ADV underlying (mns)	$7,844

Distributions

FINDING ALTERNATIVE FUNDS

Below is a list of 20 potential alternatives to the First Trust Dorsey Wright Momentum & Dividend ETF based on the alternatives' overlap in portfolio holdings with DDIV. Consider funds with lower expense ratios and/or higher ALTAR Score™ ratings as possible alternatives.

Benchmark ticker:

DDIV

Expense:

60 bp

ALTAR Score™:

6.6%

ALTERNATIVE ETFs BASED ON OVERLAP WITH DDIV
Ticker	Fund Name	Overlap¹ vs DDIV (%)	Expense ratio (bp)	Savings vs DDIV (bp)	ALTAR Score™ (%)	ALTAR vs DDIV (%)
DVOL	First Trust Dorsey Wright Momentum & Low Volatility	28.5	60	0	4.4	-2.2
DVLU	First Trust Dorsey Wright Momentum & Value	19.7	60	0	8.4	+1.8
TPHD	Timothy Plan High Dividend Stock	17.6	52	8	6.8	+0.1
PFI	Invesco Dynamic Financial Sector	15.9	60	0	4.6	-2.0
CDL	Victory CEMP US Large Cap High Div Volatility Wtd	15.4	35	25	7.9	+1.3
CDC	Victory CEMP US EQ Income Enhanced Volatility Wtd	15.4	35	25	7.9	+1.3
RNDV	US Equity Dividend Select	15.3	50	10	7.8	+1.2
PUI	Invesco DWA Utilities Momentum	14.9	60	0	4.3	-2.4
NURE	NuShares Short-Term REIT	14.7	35	25	6.6	-0.1
RORE	Hartford Multifactor REIT	14.5	45	15	12.9	+6.3
SPLV	Invesco S&P 500 Low Volatility	13.9	25	35	5.2	-1.4
LVHB	Elkhorn Lunt Low Vol/High Beta Tactical	13.9	52	8	5.0	-1.7
IYR	iShares U.S. Real Estate	13.7	42	18	5.7	-0.9
LVHD	Legg Mason Low Volatility High Dividend ETF	13.5	27	33	6.8	+0.2
QDF	FlexShares Quality Dividend	13.4	37	23	7.0	+0.4
REZ	iShares Residential Real Estate Capped	13.4	48	12	5.1	-1.6
FREL	Fidelity MSCI Real Estate	13.3	8	52	6.0	-0.6
USRT	iShares Core. U.S. REIT	13.2	8	52	6.4	-0.2
DVY	iShares Select Dividend	13.1	39	21	8.1	+1.4
FRI	First Trust S&P REIT	12.6	50	10	6.0	-0.6

¹Overlap is the percentage of holdings by weight that are identical. For example, if Fund A has a 2% position in Apple, Inc. (AAPL) and Fund B has a 5% position, their overlapping position in AAPL is 2%.

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RESULTS & ESTIMATES

	2014	2015	2016	2017	2018	2019E	2020E
Sales per share	**	**	**	**	**	**	**
Earnings per share	**	**	**	**	**	**	**
Dividends per share	**	**	**	**	**	**	**
Book value per share	**	**	**	**	**	**	**

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

OTHER FUNDAMENTAL METRICS

Long term EPS growth est.	**%		Debt-to-equity	**x
Asset turnover	**%		Assets-to-equity	**x

Return on equity

Revision activity*

*Six months ago = 100

Net margins

Compound annual growth rates

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VALUATION METRICS

	2018	2019E	2020E
Price-to-sales	**	**	**
Price-to-earnings	**	**	**
Price-to-cash flow	**	**	**
Price-to-growth	**	**	**
Price-to-book value	**	**	**
Yield	**	**	**

Historical valuation trends

Forward multiple:	First Trust Dorsey Wright Momentum & Dividend
Relative to:	S&P500	MSCI EAFE	MSCI Emg. Mkts.	Other ETF:

OVERWEIGHT

Above average appreciation potential. A rating of OVERWEIGHT is assigned to ETFs with ALTAR Scores in the 4th quintile (ranking higher than 60%-80%) of their category. Typically, funds in this category consist of stocks trading at attractive valuations and/or having above-average fundamentals.

ALTAR Score™

Calculation of ALTAR Score™
Avg. Return on Equity	16.6	%
Divided by: Fwd. P/BV	2.3	x
Less: Expense ratio	60	bp
Equals: ALTAR Score	6.6	%

More information on ALTAR Score™

MODERN PORTFOLIO THEORY info

CONSENSUS RECOMMENDATIONS: FUND CONSTITUENTS

COMPOSITE RATING	1.70	CATEGORY AVERAGE	1.55

The composite rating is a weighted average of analysts' consensus recommendations for individual ETF constituents, based on the following scale: BUY = 1; OVERWEIGHT = 1.5, HOLD = 2; UNDERWEIGHT = 2.5; and SELL = 3. Readers are cautioned that because analyst ratings tend to be inflated, the composite score may be more useful as a relative measure of sentiment between funds rather than as a stand-alone recommendation.