At a glance
FDM charges 0.6% a year. It has $265.3M in assets; it paid 1.51% of its price in distributions over the past 12 months, quarterly. Over the past year it returned +22.3% with distributions reinvested (S&P 500: +11.5%); over three years it returned +22.7% a year. At its worst it fell 45.0% in the 2020 crash (S&P 500: 33.7%) and 22.0% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 9 months and 15 months after the lows. Its ten largest positions make up 16.0% of the fund, out of 149 in all.
The short version
First Trust Dow Jones Select MicroCap Index Fund (FDM) is an ETF that tracks the Dow Jones Select MicroCap Index, a basket of about 150 very small US companies that pass size, trading and profit screens. Many micro-cap funds simply buy the smallest stocks. This one drops companies with losses, the richest valuations or the weakest recent returns. The trade-off is a 0.60% expense ratio and steep falls in past crashes, including a 63.4% drop from 2007 to 2009.
Price history
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FDM +22.3% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| FDM official prospectus, to Dec 31, 2025 | — | +18.62% | — | +12.48% | +10.90% | +8.32% |
| FDM price data to Oct 27, 2026 | +15.3% | +22.3% | +22.7% | +10.1% | +11.5% | +8.7% |
- Over the year to Oct 27, 2026, FDM returned +22.3%.
- Its 5-year annualized return was +10.1% and its 10-year +11.5%.
- In the 2020 COVID crash it fell 45% and regained its old high 9.2 months after the low.
- Its worst full calendar year was 2008 (-31.9%); its best was 2013 (+44.1%).
- The deepest fall in its price history was 63.4% (Jul 12, 2007 to Mar 9, 2009), recovered by Feb 19, 2013.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +15.3% | — |
| 2025 | +18.6% | +18.62% |
| 2024 | +13.0% | +12.73% |
| 2023 | +12.8% | +13.01% |
| 2022 | -11.6% | -11.56% |
| 2021 | +35.0% | +34.71% |
| 2020 | -4.1% | -4.25% |
| 2019 | +27.5% | +27.25% |
| 2018 | -13.5% | -12.68% |
| 2017 | +8.7% | +8.44% |
| 2016 | +35.9% | +35.45% |
| 2015 | -0.1% | — |
| 2014 | +3.2% | — |
| 2013 | +44.1% | — |
| 2012 | +15.7% | — |
| 2011 | -8.7% | — |
| 2010 | +25.6% | — |
| 2009 | +20.1% | — |
| 2008 | -31.9% | — |
| 2007 | -7.3% | — |
| 2006 | +15.9% | — |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Lost 62.4% over that stretch · deepest drop along the way 62.4%, back to its old high 46.8 months after the low |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 43.1% over that stretch · deepest drop along the way 45%, back to its old high 9.2 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 19.4% over that stretch · deepest drop along the way 22%, back to its old high 14.8 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $0.9900 | |
| 2025 | $1.1400 | +7.5% |
| 2024 | $1.0600 | -5.4% |
| 2023 | $1.1200 | +10.9% |
| 2022 | $1.0100 | +48.5% |
| 2021 | $0.6800 | -16.0% |
| 2020 | $0.8100 | +14.1% |
| 2019 | $0.7100 | +39.2% |
| 2018 | $0.5100 | +10.9% |
| 2017 | $0.4600 | -9.8% |
| 2016 | $0.5100 | +8.5% |
| 2015 | $0.4700 | +95.8% |
| 2014 | $0.2400 | -11.1% |
| 2013 | $0.2700 | -32.5% |
| 2012 | $0.4000 | +150.0% |
| 2011 | $0.1600 | +77.8% |
| 2010 | $0.0900 | -10.0% |
| 2009 | $0.1000 | -44.4% |
| 2008 | $0.1800 | +28.6% |
| 2007 | $0.1400 | +150.0% |
| 2006 | $0.0560 |
What's inside
As of Jun 30, 2026, the fund held 149 securities; the ten largest made up 15.97% of assets.
| Holding | Weight | |
|---|---|---|
| STOKE THERAPEUTICS INC | 2.29% | |
| TETRA TECHNOLOGIES INC | 1.92% | |
| NWPX INFRASTRUCTURE INC | 1.81% | |
| DAUCH CORP | 1.61% | |
| DOUGLAS DYNAMICS INC | 1.56% | |
| UNITED FIRE GROUP INC | 1.45% | |
| DELUXE CORP | 1.37% | |
| USA TODAY CO INC | 1.35% | |
| OIL-DRI CORP OF AMERICA | 1.31% | |
| UNIVERSAL INSURANCE HOLDINGS INC | 1.30% | |
| HORIZON BANCORP INC | 1.28% | |
| BUSINESS FIRST BANCSHARES INC | 1.26% | |
| CENTRAL PACIFIC FINANCIAL CORP | 1.25% | |
| CNB FINANCIAL CORP (PENNSYLVANIA) | 1.24% | |
| AMERICAN PUBLIC EDUCATION INC | 1.23% |
By country
United States 96.23%Cayman Islands 1.6%Marshall Islands 1.19%Canada 0.65%United Kingdom 0.61%By asset type
Stocks 99.97%RA 1.05%What changed recently
- Over the three months to Jun 30, 2026, investors added a net $8.8M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +7.38%, -1.08%, +6.97%.
How it works
FDM is an index fund. It normally puts at least 90% of its net assets in the stocks of the Dow Jones Select MicroCap Index, which S&P Dow Jones Indices builds and maintains, and aims to match the index's returns before fees. Micro-caps are the smallest publicly traded companies. The starting pool is every stock at or below the micro-cap size limit in the Dow Jones U.S. Total Stock Market Index. To stay in the pool, a stock must rank in the top 1,000 by market value, the top 1,000 by three-month average trading value and the top 1,500 by one-month trading value.
Next come five screens. A stock is cut if it falls in the highest 20% for price-to-earnings (share price divided by profit per share) or price-to-sales. It is also cut if it falls in the lowest 20% for last quarter's profit growth, operating profit margin or six-month return. After that, any company with losses, a missing P/E or a negative operating margin is removed. The stocks that remain are weighted by float-adjusted market value, meaning only shares the public can trade count toward a company's size.
The index rebalances every quarter and fully rebuilds once a year. The fund's turnover was 83%, which can add trading costs. As of June 30, 2026, the fund owned only ordinary stocks, with no derivatives. Its top 10 holdings made up 15.97% of assets, led by Stoke Therapeutics at 2.29% and TETRA Technologies at 1.92%.
What it really costs
- FDM charges 0.6% a year.
- Of that, 0.5% is the management fee; the rest covers other fund expenses.
- The fee includes a 0.05% waiver from the adviser, which may end.
In a retirement portfolio
FDM offers a small, screened slice of US micro-cap stocks, but its past losses have been too deep and too slow to recover for it to anchor a retirement portfolio.
FDM could add tiny, profitable US companies that large-company funds barely own. The cost of that is volatility. In the 2008 financial crisis the fund fell 62.4% and did not recover until February 2013. Its deepest drop was 63.4%, from July 2007 to March 2009, and recovery took about 47 months. Its worst calendar year was 2008, when it lost 31.9%. In the 2020 COVID crash it lost 45% in about a month and recovered by December 2020. In the 2022 bear market it fell 22% and took about 15 months to recover, until December 2023. A retiree who had to sell shares during any of these stretches would have locked in large losses.
Income is modest. The trailing yield was 1.51% as of October 27, 2026, paid quarterly. The 0.60% expense ratio is a steady drag on returns. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want a small allocation to about 150 US micro-caps screened for profits, moderate valuations and recent price strength.
- Long-horizon holders who can sit through drops like the 63.4% fall from 2007 to 2009 and a recovery that took about four years.
- People comfortable with a large share of financial companies, such as Horizon Bancorp, Central Pacific Financial and United Fire Group, among the top holdings.
Look elsewhere if
- Anyone who may need to sell in a downturn. The fund lost 45% in about a month in early 2020.
- Cost-focused investors. The 0.60% expense ratio is higher than many broad index funds charge, and 83% portfolio turnover adds trading costs.
- Income seekers. The trailing yield was only 1.51% as of October 27, 2026, paid quarterly.
Close alternatives
Matched by holdings overlap from the latest N-PORT reports.
No close alternatives found.
Questions investors ask
Is FDM good for retirement?
FDM fits better as a small, higher-risk part of a retirement portfolio than as a core holding. It holds about 150 tiny US companies, and it has had deep falls. It dropped 62.4% in the 2008 financial crisis and took until February 2013 to recover. It also lost 45% in early 2020. Its trailing yield was 1.51% as of October 27, 2026. Someone who may need to sell in a downturn could be hurt by swings like these.
What does FDM invest in?
FDM holds US micro-cap stocks chosen by the Dow Jones Select MicroCap Index. The index excludes companies with losses, the highest price-to-earnings or price-to-sales ratios, or weak recent profit growth, margins or returns. As of June 30, 2026, the fund held 149 stocks, about 96% of them in US companies. The largest were Stoke Therapeutics, TETRA Technologies, NWPX Infrastructure and Dauch Corp. As of March 31, 2026, financial companies made up a significant share of the fund.
What is FDM's expense ratio?
FDM's expense ratio is 0.60%, according to the prospectus filed April 30, 2026. That fee comes out of the fund's assets every year, so investors don't pay it directly. The fund's portfolio turnover was 83%, partly because the index rebalances every quarter. That much trading can add costs that the expense ratio doesn't show. Investors may want to compare it with other small-company index funds.
Does FDM pay dividends?
Yes. FDM pays dividends quarterly. Over the 12 months to October 27, 2026, it paid $1.37 per share, a trailing yield of 1.51%. The dividends come from the small companies the fund holds, so the amount can change from quarter to quarter. For investors who rely on portfolio income, that yield is modest. FDM is mainly a growth holding, not an income fund.
How has FDM performed over the last 10 years?
FDM returned an average of 10.9% a year over the 10 years ending December 31, 2025, based on the fund's prospectus. It returned 12.48% a year over five years and 18.62% over one year. Since its 2005 launch it has averaged 8.32% a year. The path was bumpy. It gained 34.71% in 2021 but lost 12.68% in 2018 and 11.56% in 2022. Its worst quarter, in early 2020, was a 38.22% loss.