First Trust Managed Futures Strategy Fund (FMF)

Overview

The First Trust Managed Futures Strategy Fund (FUT) is an actively managed ETF that seeks capital appreciation by investing in commodity futures contracts and other financial instruments. The fund aims to provide exposure to a diversified portfolio of managed futures strategies, which can potentially benefit from rising or falling markets.

Reputation and Reliability

First Trust is a well-established ETF issuer with a reputation for offering innovative and actively managed funds. They have a long track record in the ETF market.

Management Expertise

First Trust has a team of experienced investment professionals with expertise in managed futures and alternative investment strategies.

Goal

To seek capital appreciation.

Investment Approach and Strategy

Strategy: The fund employs an actively managed futures strategy, investing in a diversified portfolio of futures contracts across various sectors, including agriculture, energy, metals, and currencies.

Composition The ETF primarily holds futures contracts and other financial instruments such as money market instruments and cash equivalents.

Market Share: The ETF's market share within the managed futures ETF category varies depending on AUM and trading volume compared to its peers.

Total Net Assets (AUM): 24970000

Key Competitors

• DBMF
• KMLM
• FTAI

Competitive Landscape

The managed futures ETF market is competitive, with several funds offering similar strategies. FUT competes on its active management approach and the specific expertise of its management team. Advantages include the potential for outperformance through active management, while disadvantages may include higher expense ratios and the risk of underperformance compared to passively managed alternatives.

Historical Performance: Historical performance data should be analyzed across various time frames (e.g., 1-year, 3-year, 5-year, 10-year, since inception).

Benchmark Comparison: The ETF's performance can be compared to benchmarks such as the Barclay CTA Index to assess its effectiveness.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume provides insight into how easily shares of the ETF can be bought or sold on a daily basis.

Bid-Ask Spread

The bid-ask spread reflects the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept, representing a cost to trade.

Market Environment Factors

Economic indicators like inflation, interest rates, and commodity price trends, as well as global market volatility, can significantly impact the performance of managed futures strategies.

Growth Trajectory

The ETF's growth trajectory is influenced by investor demand for alternative investments, particularly those offering diversification benefits and potential downside protection.

Competitive Edge

FUT's competitive edge lies in its active management approach, which allows the fund to adapt to changing market conditions and potentially generate alpha. The fund benefits from the expertise of First Trust's investment professionals in managed futures strategies. This active approach aims to identify and capitalize on trends in various futures markets. However, active management also introduces the risk of underperformance relative to passively managed benchmarks. The fund's ability to navigate different market environments is a key differentiator.

Volatility

Assess the ETF's historical volatility using metrics such as standard deviation and beta.

Market Risk

The ETF is subject to market risk associated with fluctuations in commodity prices, interest rates, and currency values. Specific risks include commodity price volatility, counterparty risk in futures contracts, and the potential for leverage to amplify both gains and losses.

Ideal Investor Profile

The ideal investor is someone seeking diversification, has a higher risk tolerance, and understands the complexities of managed futures strategies.

Market Risk

The ETF is more suitable for active traders or investors seeking alternative investments rather than passive index followers.

First Trust Managed Futures Strategy Fund (FUT) provides exposure to a diversified portfolio of managed futures strategies through active management. The fund seeks capital appreciation by investing in commodity futures contracts and other financial instruments. It's designed for investors seeking diversification and who understand the risks associated with futures markets and active management. Investors should consider its higher expense ratio and potential volatility compared to passive investments. Its performance is sensitive to market dynamics and the manager's ability to identify profitable trends.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Investment decisions should be based on individual circumstances and consultation with a qualified financial advisor. Market share and AUM data can change frequently.