First Trust Active Factor Mid Cap ETF (AFMC)

Overview

The First Trust Active Factor Mid Cap ETF (AFSM) is an actively managed ETF that seeks to provide long-term capital appreciation by investing in a diversified portfolio of mid-capitalization U.S. stocks. The ETF focuses on companies exhibiting attractive value, quality, momentum, and volatility characteristics.

Reputation and Reliability

First Trust is a well-established ETF provider with a solid reputation in the market, known for its innovative and factor-based investment strategies.

Management Expertise

First Trust has a team of experienced investment professionals dedicated to active management, with expertise in factor-based investing and quantitative analysis.

Goal

To provide long-term capital appreciation.

Investment Approach and Strategy

Strategy: AFSM is actively managed and doesn't track a specific index. It uses a proprietary methodology to select and weight stocks based on value, quality, momentum, and volatility factors.

Composition The ETF primarily holds a diversified portfolio of U.S. mid-cap stocks.

Market Share: AFSM's market share within the mid-cap factor ETF segment is moderate, representing a portion of the overall market.

Total Net Assets (AUM): 46680000

Key Competitors

• Vanguard Mid-Cap Value ETF (VOE)
• iShares Core S&P Mid-Cap ETF (IJH)
• Schwab U.S. Mid-Cap ETF (SCHM)

Competitive Landscape

The mid-cap ETF market is highly competitive. AFSM differentiates itself through its active factor-based approach, offering potentially higher returns but also exposing investors to greater management risk. Competitors like VOE and IJH offer broad, passive exposure to the mid-cap segment, often at lower expense ratios.

Historical Performance: Historical performance data needs to be extracted from financial data providers to accurately determine the historical performance. It needs to be updated over different time periods.

Benchmark Comparison: Benchmark comparison should be provided based on specific financial data providers to compare the ETFu2019s performance to its benchmark index. It needs to be updated.

Expense Ratio: 0.79

Average Trading Volume

The average trading volume is moderate, reflecting the relatively smaller size of the ETF.

Bid-Ask Spread

The bid-ask spread is generally competitive but can widen during periods of market volatility.

Market Environment Factors

Economic indicators, interest rates, and sector-specific growth prospects influence AFSM's performance. Overall market conditions and investor sentiment toward mid-cap stocks play a significant role.

Growth Trajectory

AFSM's growth trajectory depends on the success of its active management strategy and the demand for factor-based mid-cap exposure. Changes to strategy and holdings reflect the fund manager's evolving views on market conditions.

Competitive Edge

AFSM's competitive edge lies in its active factor-based approach, which aims to outperform traditional passive mid-cap benchmarks. Its stock selection process focuses on key factors that have historically been associated with higher returns. The active management approach allows the fund to adapt to changing market conditions and potentially mitigate downside risk. The downside is that this strategy could underperform.

Volatility

AFSM's volatility is influenced by market volatility and the inherent risks of actively managed funds. Given it is actively managed, stock selections could amplify volatility.

Market Risk

AFSM is exposed to market risk, including the risk of declines in the overall market and sector-specific risks associated with its holdings.

Ideal Investor Profile

AFSM is suitable for investors seeking long-term capital appreciation through exposure to mid-cap stocks and who are comfortable with active management and its associated risks. Investors who believe that factor-based investment strategies outperform their passive benchmark are most aligned with AFSM's objectives.

Market Risk

AFSM is best for long-term investors who are willing to accept higher fees for the potential of outperformance compared to passive index funds.

First Trust Active Factor Mid Cap ETF (AFSM) is an actively managed ETF that invests in a diversified portfolio of mid-capitalization U.S. stocks, utilizing a factor-based approach. Its actively managed structure provides the opportunity to outperform passively managed ETF's. However, its expense ratio is higher than passively managed ETF's. AFSM is suitable for long-term investors who are comfortable with active management and its associated risks.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.