First Trust North American Energy Infrastructure Fund (EMLP)

Overview

The First Trust North American Energy Infrastructure Fund (EMES) is an actively managed ETF focused on North American energy infrastructure companies. It invests in companies that own and operate pipelines, storage facilities, and other energy infrastructure assets. The strategy aims to provide investors with exposure to stable, income-generating assets within the energy sector.

Reputation and Reliability

First Trust is a well-established ETF issuer known for a diverse range of actively and passively managed funds. They have a significant presence in the ETF market with a generally good reputation for operational reliability.

Management Expertise

The fund is managed by the team at First Trust, which has extensive experience in managing various asset classes, including infrastructure and energy-related investments. Their active management approach implies a dedicated research and selection process.

Goal

To seek current income and capital appreciation from a diversified portfolio of North American energy infrastructure companies.

Investment Approach and Strategy

Strategy: This ETF is actively managed, meaning the portfolio managers select individual securities rather than strictly tracking an index. The strategy focuses on companies involved in the transportation, storage, and processing of energy commodities.

Composition The ETF primarily holds common stocks of companies within the energy infrastructure sector. This includes midstream energy companies, utilities with significant infrastructure assets, and energy storage providers.

Market Share: Specific market share data for individual ETFs is often proprietary or difficult to ascertain definitively. EMES operates within a specialized niche of the energy sector.

Total Net Assets (AUM): 250000000

Key Competitors

• Alerian MLP ETF (AMLP)
• Global X MLP ETF (MLPA)
• Invesco Dynamic Energy MLP Opportunities ETF (PEY)

Competitive Landscape

The North American energy infrastructure ETF space is competitive, dominated by products focused on Master Limited Partnerships (MLPs). EMES distinguishes itself through its active management and broader inclusion of energy infrastructure companies beyond just MLPs, potentially offering a more diversified exposure. However, its actively managed nature may lead to higher expense ratios compared to passive index-tracking ETFs, and its performance is highly dependent on the manager's stock selection ability.

Historical Performance: Historical performance data for EMES shows variable returns, influenced by energy price fluctuations and broader market sentiment towards infrastructure. Over the past 5 years, it has experienced periods of both growth and decline, reflecting the cyclical nature of the energy sector.

Benchmark Comparison: EMES's performance is often compared to indices like the Alerian MLP Infrastructure Index. Its active management aims to outperform such benchmarks, but results can vary. Detailed year-over-year percentage changes are available in financial data providers.

Expense Ratio: 0.95

Average Trading Volume

The average daily trading volume for EMES is sufficient to allow for easy entry and exit for most retail investors.

Bid-Ask Spread

The bid-ask spread for EMES is generally narrow, indicating good liquidity and low trading costs for investors.

Market Environment Factors

EMES is influenced by global energy demand, commodity prices (oil and natural gas), interest rate policies (affecting financing costs for infrastructure projects), and regulatory changes affecting the energy sector. Growth prospects are tied to the continued expansion and maintenance of energy infrastructure in North America.

Growth Trajectory

The growth trajectory of EMES is linked to the investment in and demand for North American energy infrastructure. Recent strategies may involve adjustments to holdings based on evolving energy transition trends and the increasing importance of natural gas infrastructure.

Competitive Edge

EMES's primary competitive edge lies in its active management strategy, allowing for dynamic adjustments to portfolio holdings to capitalize on perceived opportunities within the North American energy infrastructure landscape. The fund's focus on a diversified range of infrastructure assets, not solely limited to MLPs, may offer a broader and potentially less volatile exposure. Furthermore, its active approach allows managers to potentially identify undervalued companies or those with strong dividend growth potential in a sector that often emphasizes income generation.

Volatility

EMES has exhibited moderate to high historical volatility, consistent with investments in the energy sector. Its performance can be significantly affected by commodity price swings and macroeconomic conditions.

Market Risk

The primary market risks for EMES include fluctuations in oil and natural gas prices, regulatory changes impacting energy infrastructure development and operation, geopolitical events affecting supply and demand, and interest rate risk, which can influence the cost of capital for its underlying companies.

Ideal Investor Profile

The ideal investor for EMES is one seeking income and growth from the energy infrastructure sector, who has a moderate to high risk tolerance, and believes in the long-term prospects of North American energy production and transportation. Investors should also be comfortable with active management and the inherent volatility of the energy market.

Market Risk

EMES is generally best suited for long-term investors who are looking for diversification within their energy allocation and are seeking potential income streams. It is less suitable for short-term traders due to its volatility.

The First Trust North American Energy Infrastructure Fund (EMES) is an actively managed ETF providing exposure to North American energy infrastructure companies. It aims for current income and capital appreciation, but its performance is subject to the inherent volatility of the energy sector and commodity prices. While facing competition from MLP-focused ETFs, EMES offers a potentially broader investment scope. Investors should have a moderate to high risk tolerance and a long-term investment horizon.

Data Sources:

• First Trust website
• Financial data aggregators (e.g., Morningstar, ETF.com)

Disclaimers:

This information is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investors should conduct their own due diligence before making any investment decisions.