First Trust Active Factor Mid Cap ETF (AFMC)

Overview

The First Trust Active Factor Mid Cap ETF (AFMC) seeks long-term capital appreciation by investing in a diversified portfolio of mid-capitalization U.S. companies, utilizing a quantitative, active management strategy that focuses on factors like value, momentum, and quality.

Reputation and Reliability

First Trust is a well-established ETF provider with a generally positive reputation for innovation and a wide range of investment products.

Management Expertise

First Trust has a dedicated team of portfolio managers and quantitative analysts experienced in factor-based investing and active management strategies.

Goal

The ETF aims to achieve long-term capital appreciation.

Investment Approach and Strategy

Strategy: AFMC employs an active management strategy driven by quantitative factor analysis, selecting stocks based on value, momentum, and quality characteristics.

Composition The ETF primarily holds common stocks of mid-capitalization U.S. companies.

Market Share: AFMC holds a relatively small market share within the broader mid-cap ETF universe.

Total Net Assets (AUM): 63610000

Key Competitors

• IJH
• VO
• MDY
• IWR

Competitive Landscape

The mid-cap ETF space is highly competitive, dominated by passively managed, index-tracking funds. AFMC differentiates itself through its active, factor-based approach. Advantages include potential for outperformance, while disadvantages include higher expense ratio and potential for underperformance relative to benchmarks.

Historical Performance: Historical performance data needs to be obtained from financial data providers. Past performance is not indicative of future results.

Benchmark Comparison: The ETF's performance should be compared to the Russell Midcap Index to evaluate its effectiveness. This comparison requires historical performance data.

Expense Ratio: 0.69

Average Trading Volume

AFMC exhibits moderate trading volume, which might affect the ease of entering and exiting positions, especially for large orders.

Bid-Ask Spread

The bid-ask spread for AFMC is generally moderate, indicating a reasonable cost for trading the ETF under normal market conditions.

Market Environment Factors

Economic growth, interest rate changes, and investor sentiment towards mid-cap companies all influence AFMC's performance. Sector-specific developments within the mid-cap space also play a role.

Growth Trajectory

AFMC's growth trajectory depends on its ability to consistently deliver superior risk-adjusted returns through its factor-based stock selection process. Changes in factor preferences among investors can also impact its performance and holdings.

Competitive Edge

AFMC's competitive advantage stems from its active, factor-based approach to mid-cap investing. By employing a quantitative strategy focused on value, momentum, and quality factors, AFMC aims to identify undervalued companies with strong growth potential. This active management approach differentiates it from passively managed, index-tracking ETFs. The ETF provides exposure to mid-cap equities, potentially offering a balance between growth and stability.

Volatility

The volatility of AFMC is expected to be comparable to other mid-cap equity ETFs. Volatility needs to be measured using historical price data.

Market Risk

AFMC is subject to market risk, meaning its value can decline due to broad market downturns or negative sentiment towards mid-cap stocks. Specific company risk also exists, as the performance of individual holdings can impact the ETF's overall performance.

Ideal Investor Profile

The ideal investor for AFMC is someone seeking long-term capital appreciation and is comfortable with moderate levels of risk. Investors looking for active management within the mid-cap space are suitable.

Market Risk

AFMC is suitable for long-term investors who are willing to accept a higher expense ratio for the potential of outperforming the benchmark.

First Trust Active Factor Mid Cap ETF (AFMC) offers investors a way to gain exposure to mid-cap U.S. equities through an actively managed, factor-based approach. AFMCu2019s objective is long-term capital appreciation through selecting mid-cap stocks based on value, momentum, and quality. While the ETF differentiates itself from passive alternatives, it faces stiff competition in the mid-cap ETF market. Potential investors should consider AFMC's expense ratio and potential for both outperformance and underperformance compared to its benchmark.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.