First Trust Active Factor Large Cap ETF (AFLG)

Overview

The First Trust Active Factor Large Cap ETF (FFA) is an actively managed fund that seeks capital appreciation by investing in a portfolio of large-cap U.S. stocks selected using a quantitative process that considers factors like value, momentum, quality, and volatility.

Reputation and Reliability

First Trust is a well-established ETF provider known for its innovative and factor-based investment strategies.

Management Expertise

First Trust has a dedicated team of investment professionals with experience in quantitative investing and portfolio management.

Goal

Seeks capital appreciation.

Investment Approach and Strategy

Strategy: The ETF does not track a specific index but uses a quantitative process to select stocks based on factors such as value, momentum, quality, and volatility.

Composition The ETF holds a portfolio of U.S. large-cap stocks.

Market Share: FFA's market share in the actively managed large-cap ETF segment is relatively small compared to passively managed broad market ETFs.

Total Net Assets (AUM): 332493456.7

Key Competitors

• SPDR Portfolio S&P 500 ETF (SPLG)
• iShares Core S&P 500 ETF (IVV)
• Vanguard S&P 500 ETF (VOO)

Competitive Landscape

The actively managed large-cap ETF market is competitive, with many passively managed index funds dominating in terms of AUM and market share. FFA competes by offering a factor-based approach, potentially providing higher returns than passive funds, but at the cost of higher expense ratios and potential underperformance. The disadvantage includes higher expense ratios and potential tracking error, while advantages include potential for alpha generation through active management.

Historical Performance: Performance data unavailable.

Benchmark Comparison: Performance data unavailable.

Expense Ratio: 0.006

Average Trading Volume

The ETF exhibits moderate liquidity with an average daily trading volume that facilitates relatively easy entry and exit for investors.

Bid-Ask Spread

The bid-ask spread is generally tight, indicating efficient trading and lower transaction costs.

Market Environment Factors

Economic indicators, sector performance, and overall market sentiment can influence FFA's performance, as its factor-based approach may favor certain market conditions.

Growth Trajectory

The growth trajectory depends on the ETF's ability to consistently deliver alpha through its factor-based investment strategy. Changes to strategy and holdings are actively managed to optimize factor exposure.

Competitive Edge

FFA's competitive edge lies in its active management and factor-based approach, which aims to outperform the broad market by selectively investing in stocks with favorable value, momentum, quality, and volatility characteristics. The quantitative approach provides a disciplined investment process that seeks to avoid emotional biases. First Trust's reputation and expertise in factor investing further enhance the fund's appeal. The active management allows for adjustments to the portfolio based on changing market conditions and factor performance.

Volatility

Volatility data needs to be calculated but would likely be influenced by the ETF's factor exposures and stock selection.

Market Risk

The ETF is subject to market risk, as its performance is tied to the performance of the U.S. large-cap equity market. Specific factor exposures may also introduce additional risks, depending on the prevailing market environment.

Ideal Investor Profile

The ideal investor is one seeking capital appreciation with a moderate risk tolerance and a preference for active management and factor-based investing. Investors who believe in the potential for factor-based strategies to outperform the broad market may find this ETF appealing.

Market Risk

FFA is suitable for long-term investors seeking capital appreciation who are comfortable with active management and factor-based investing.

The First Trust Active Factor Large Cap ETF is an actively managed fund employing a quantitative approach to select U.S. large-cap stocks based on factors like value, momentum, quality, and volatility. It aims to provide capital appreciation by potentially outperforming passive large-cap indices. The ETF's performance is dependent on the effectiveness of its factor-based strategy and the expertise of First Trust's management team. Investors should consider their risk tolerance and investment goals before investing. It has a higher expense ratio than passive funds.

Data Sources:

• First Trust
• Morningstar
• ETF.com

Disclaimers:

This analysis is based on available information and should not be considered investment advice. Past performance is not indicative of future results. Consult with a financial advisor before making investment decisions.