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Upturn AI Summary
First Trust Active Factor Small Cap ETF(AFSM)
Advisory History & Simulated Performance *
*as per simulation (see disclosures)- ALL
- 1Y
- 1M
- 1W
- BUY Advisory
- SELL Advisory (Profit)
- SELL Advisory (Loss)
- Profit
- Loss
- PASS (Skip)
Stock price based on last close Advisory Performance History (Simulated)
Upturn Advisory & Investor View for AFSM
10/28/2026: AFSM (2-star) is currently NOT-A-BUY. Pass it for now.
First Trust Active Factor Small Cap ETF (AFSM) provides active, factor-based exposure to the US small-cap equity market, aiming to outperform standard indices through quantitative security selection. Its main strengths include the potential for active alpha and a disciplined factor process, though it faces competition from larger, lower-cost passive peers and exhibits higher volatility. The fund is best suited as a tactical satellite holding for investors comfortable with small-cap risks and active management costs. Key factors to monitor include the fund's expense ratio, the effectiveness of its proprietary factor model relative to the Russell 2000, and overall small-cap market sentiment.
How to Read the Upturn Advisory
The Upturn Star Rating and the current BUY, SELL, or PASS advisory are generated by Upturn’s AI advisory engine based on proprietary signal analysis, price behavior, advisory history, and historical signal performance.
ETF holdings, costs, diversification, valuation, risks, and market conditions provide supporting context about the fund.
Investor Fit
| Investor style | Fit | Why |
|---|---|---|
| Growth investor | Mixed fit | While small caps are growth-oriented, the active factor approach may prioritize quality or value over pure aggressive growth. |
| Momentum investor | Strong fit while signal remains positive | The factor-based methodology often incorporates momentum signals, aligning well with momentum strategies when market conditions favor them. |
| Value investor | Strong fit | The fund's quantitative screening frequently targets value characteristics, making it suitable for those seeking value in the small-cap space. |
| Dividend/Income investor | Weak fit | Small-cap equities are generally growth-oriented and typically offer lower dividend yields compared to large-cap or income-focused funds. |
| Low-risk investor | Weak fit | Small-cap stocks inherently carry higher volatility and risk than large-cap or broad-market investments. |
Investor Profile
Ideal Investor Profile
The ideal investor is one who believes in the potential of active factor management and is willing to accept higher costs and volatility for the chance of outperforming the small-cap benchmark.
Suitability
AFSM is generally best suited for long-term investors incorporating a satellite position within a diversified portfolio, rather than for active traders or passive index followers.
Risk Profile
| Risk factor | Level | Why it matters |
|---|---|---|
| Volatility | High | Small-cap stocks are historically more volatile than the broader market. |
| Market risk | High | The fund's performance is tied directly to the performance of the US small-cap equity market. |
| Concentration | Medium | Factor-based selection may lead to sector or security concentrations different from the broader index. |
| Tracking/expense | Medium | The higher expense ratio compared to passive peers necessitates outperformance to justify the cost. |
| Liquidity | Medium / high | Lower trading volumes can increase transaction costs for investors. |
| Business/sector quality | Medium | The quality of underlying holdings depends on the effectiveness of the proprietary quantitative model. |
Risk Analysis
Volatility
AFSM exhibits high historical volatility, consistent with the small-cap equity asset class and the potential for factor-driven concentration.
Market Risk
The primary risk is market exposure to US small-cap equities, which are more susceptible to economic cyclicality, interest rate changes, and liquidity constraints than large-cap stocks.
What the ETF Owns
| Exposure Type | Exposure | Weight (%) | Retail Investor Read |
|---|---|---|---|
| Market capitalization | US Small-Cap Equities | 98.5 | This provides broad exposure to smaller US companies, which often offer higher growth potential but come with increased volatility. |
| Cash/collateral | Cash and Cash Equivalents | 1.5 | A small cash buffer is maintained for liquidity needs and managing daily portfolio rebalancing. |
Price Behavior
Strong Uptrend
The stock has maintained a strong upward price trend across the last three quarters.
Very Smooth
The stock has followed a highly orderly price path with minimal short-term disruption.
Analysis of Past Performance
Type ETF | Historic Profit 26.16% | Avg. Invested days 70 | Today’s Advisory PASS |
Upturn Advisory Rating  | Upturn Advisory Performance  3.0 | ETF Returns Performance  4.0 |
| Profits based on simulation | Last Close 10/28/2026 |
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