First Trust Short Duration Managed Municipal ETF (FSMB)

Overview

The First Trust Short Duration Managed Municipal ETF (FTSM) seeks to provide current income exempt from federal income taxes by investing primarily in short-term municipal bonds. It aims to deliver a consistent income stream while preserving capital by actively managing a portfolio of municipal debt securities with relatively short maturities.

Reputation and Reliability

First Trust is a well-established and reputable provider of ETFs, known for its innovative investment strategies and a strong track record in the ETF market.

Management Expertise

First Trust has a dedicated team of experienced portfolio managers and municipal bond specialists who actively manage the ETF's portfolio.

Goal

To provide current income exempt from federal income taxes.

Investment Approach and Strategy

Strategy: The ETF is actively managed and does not track a specific index. It focuses on selecting municipal bonds with short maturities to minimize interest rate risk.

Composition Primarily invests in municipal debt securities, including bonds issued by states, cities, and other municipalities.

Market Share: Data Unavailable

Total Net Assets (AUM): 208419804

Key Competitors

• NEAR
• SHM
• MUB
• VTEB

Competitive Landscape

The competitive landscape for short-duration municipal bond ETFs is characterized by a few dominant players and several smaller funds. FTSM differentiates itself through active management and a focus on generating tax-exempt income. Compared to passively managed ETFs like SHM or MUB, FTSM has the potential to outperform through security selection, but that comes with added risk. Actively managed funds have higher expense ratios compared to passively managed ones.

Historical Performance: Data Unavailable

Benchmark Comparison: Data Unavailable

Expense Ratio: 0.3

Average Trading Volume

The ETF typically has a moderate average trading volume, which suggests relatively good liquidity.

Bid-Ask Spread

The bid-ask spread for FTSM is usually competitive, indicating a reasonable cost for trading the ETF.

Market Environment Factors

The ETF's performance is influenced by factors such as interest rate movements, credit spreads in the municipal bond market, and overall economic conditions. State and local government finances can affect the municipal bond market.

Growth Trajectory

The growth trajectory of FTSM depends on the demand for tax-exempt income and investor appetite for short-duration municipal bonds. Changes in tax laws and interest rate expectations can impact the ETF's growth.

Competitive Edge

FTSM's competitive advantage lies in its active management approach, which allows the portfolio managers to adjust the portfolio in response to changing market conditions. The ETF also benefits from First Trust's expertise in the ETF market and the municipal bond sector. Active management seeks to add value above a static benchmark. The Fund's goal is to provide federally tax-exempt income.

Volatility

FTSM typically exhibits low volatility due to its focus on short-duration municipal bonds.

Market Risk

The ETF is exposed to interest rate risk, credit risk, and market risk. Rising interest rates can negatively impact the value of the bonds in the portfolio. Credit risk arises from the possibility that a bond issuer may default on its payments.

Ideal Investor Profile

The ideal investor for FTSM is a risk-averse investor seeking tax-exempt income with a short-term investment horizon. It's suitable for investors in higher tax brackets who want to minimize their federal income tax liability.

Market Risk

FTSM is best suited for long-term investors who prioritize income and capital preservation over high growth. It may also be appropriate for active traders who seek to capitalize on short-term market movements.

The First Trust Short Duration Managed Municipal ETF (FTSM) is designed for investors seeking tax-exempt income with a focus on capital preservation. By actively managing a portfolio of short-duration municipal bonds, FTSM aims to deliver consistent income while minimizing interest rate risk. The ETF is managed by First Trust, a reputable issuer with expertise in the ETF market. FTSM is most suitable for risk-averse investors in higher tax brackets who prioritize income and stability.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

The data provided is for informational purposes only and should not be considered financial advice. Investment decisions should be made based on individual circumstances and after consulting with a qualified financial advisor.