First Trust Horizon Managed Volatility Developed International ETF (HDMV)

Overview

The First Trust Horizon Managed Volatility Developed International ETF (NYSEARCA: HDMV) seeks to provide investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called the Horizon Managed Volatility Developed International Index. It focuses on developed international markets and employs a managed volatility strategy.

Reputation and Reliability

First Trust is a well-established ETF provider known for its innovative and thematic investment products. It has a solid track record and is considered reliable.

Management Expertise

First Trust has experienced portfolio managers and analysts specializing in quantitative strategies and international equity markets.

Goal

The fund seeks investment results that correspond generally to the price and yield of the Horizon Managed Volatility Developed International Index.

Investment Approach and Strategy

Strategy: The ETF aims to track the Horizon Managed Volatility Developed International Index. This index is designed to provide exposure to developed international equities while managing volatility.

Composition The ETF primarily holds stocks of companies in developed international markets (excluding the U.S. and Canada). The portfolio composition is dynamically adjusted to manage volatility.

Market Share: HDMV's market share is relatively small compared to the broader developed international equity ETF market.

Total Net Assets (AUM): 251200000

Key Competitors

• iShares MSCI EAFE ETF (EFA)
• Vanguard FTSE Developed Markets ETF (VEA)
• Schwab International Equity ETF (SCHF)

Competitive Landscape

The developed international equity ETF market is highly competitive, dominated by low-cost, broad-market ETFs like EFA and VEA. HDMV differentiates itself with its managed volatility strategy, which may appeal to risk-averse investors but comes with higher costs and potentially lower returns in strongly rising markets. Competitors like EFA and VEA offer broader market exposure at a lower cost.

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

Benchmark Comparison: Benchmark comparison should be made against the Horizon Managed Volatility Developed International Index. Data is not available for this comparison.

Expense Ratio: 0.29

Average Trading Volume

HDMV's average trading volume is moderate and should be confirmed via current data.

Bid-Ask Spread

The bid-ask spread is typically relatively tight but it's subject to daily fluctuations.

Market Environment Factors

Economic growth in developed international markets, interest rate policies, currency fluctuations, and geopolitical events significantly affect HDMV.

Growth Trajectory

Growth trajectory depends on the adoption of its managed volatility approach, market conditions, and investor preferences. A change in strategy or holdings has not occurred recently.

Competitive Edge

HDMV's competitive advantage lies in its managed volatility strategy, which aims to reduce portfolio risk during market downturns. This approach may attract investors seeking downside protection, differentiating it from traditional market-cap-weighted international equity ETFs. However, this strategy may limit upside participation during bull markets. Its proprietary index also differentiates it.

Volatility

HDMV's historical volatility is expected to be lower than that of a broad market developed international equity ETF due to its managed volatility strategy.

Market Risk

HDMV is subject to market risk, including fluctuations in international equity markets, currency risk, and geopolitical risk in the countries it invests in.

Ideal Investor Profile

HDMV is suited for risk-averse investors seeking exposure to developed international equities with reduced volatility. Investors should understand that the managed volatility strategy may limit upside potential.

Market Risk

HDMV may be suitable for long-term investors seeking diversification and downside protection in their international equity allocation.

The First Trust Horizon Managed Volatility Developed International ETF (HDMV) offers exposure to developed international equities with a focus on managing volatility. Its managed volatility strategy aims to provide downside protection during market downturns, which may appeal to risk-averse investors. However, this strategy may also limit upside participation in strongly rising markets. HDMV's expense ratio of 0.29% is higher than some of its broad market competitors. It's suitable for long-term investors seeking diversification and lower volatility international equity exposure.

Data Sources:

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

Disclaimers:

This analysis is for informational purposes only and does not constitute investment advice. Consult with a qualified financial advisor before making any investment decisions. Data is based on available information and may be subject to change.