First Trust High Income Strategic Focus ETF (HISF)

Overview

First Trust High Income Strategic Focus ETF (HIEF) aims to provide current income by investing in a diversified portfolio of other ETFs that focus on high-yield debt, preferred securities, and dividend-paying stocks.

Reputation and Reliability

First Trust is a well-established ETF issuer with a long track record and a solid reputation in the market.

Management Expertise

First Trust has a team of experienced investment professionals managing its ETFs, with expertise in various asset classes.

Goal

To provide current income.

Investment Approach and Strategy

Strategy: Invests in a portfolio of other ETFs representing various high-income asset classes.

Composition Primarily invests in other ETFs holding high-yield corporate bonds, preferred securities, dividend-paying stocks, and other income-generating assets.

Market Share: HIEF has a relatively small market share within the broader high-income ETF space.

Total Net Assets (AUM): 34690000

Key Competitors

• JAAA
• HYLB
• SPHY

Competitive Landscape

The high-yield ETF market is competitive, with numerous options available. HIEF differentiates itself through its strategic allocation across various income-generating asset classes via other ETFs. Competitors often focus on specific segments like high-yield bonds. HIEF's diversified approach may be advantageous during certain market conditions, while its layered expense structure can be a disadvantage compared to ETFs directly holding assets.

Historical Performance: Past performance does not guarantee future results. Reviewing performance over 1, 3, 5, and 10-year periods is crucial.

Benchmark Comparison: Comparing HIEF's performance to a blended benchmark that reflects its asset allocation is essential to assess its effectiveness.

Expense Ratio: 0.86

Average Trading Volume

The average daily trading volume is low, suggesting limited liquidity.

Bid-Ask Spread

The bid-ask spread can be wide, potentially increasing trading costs.

Market Environment Factors

Economic growth, interest rate movements, and credit spreads significantly impact HIEF's performance. Higher interest rates and widening credit spreads typically negatively affect the ETF.

Growth Trajectory

The growth trajectory depends on the demand for high-income investments and the fund's ability to generate attractive returns. Changes in asset allocation and fund strategy can also impact the ETF.

Competitive Edge

HIEF's competitive advantage lies in its diversified approach to high-income investing, allowing investors to gain exposure to multiple asset classes through a single ETF. Its strategic allocation across different income-generating asset classes provides potentially reduced risk compared to single asset class high-yield funds. The management team's ability to identify and select top-performing underlying ETFs will also contribute. HIEF allows flexibility to adjust allocations based on market conditions.

Volatility

HIEF's volatility depends on the volatility of its underlying assets, including high-yield bonds and preferred securities. It can be expected to be moderately volatile.

Market Risk

HIEF is exposed to market risk through its holdings of various ETFs which are subjected to interest rate risk, credit risk, and equity market risks.

Ideal Investor Profile

Investors seeking current income and diversification across multiple high-income asset classes. It is suitable for those comfortable with moderate risk.

Market Risk

Suitable for long-term investors seeking income and diversification, but not for active traders due to its liquidity and expense ratio.

First Trust High Income Strategic Focus ETF (HIEF) aims to provide current income through a diversified portfolio of high-yield ETFs. Its strength lies in its diversified approach, offering exposure to multiple income-generating asset classes, but low liquidity and higher expense ratio are drawbacks. It suits long-term investors seeking income with tolerance for moderate risk. Ultimately, the fundu2019s performance depends on the management teamu2019s allocation strategy and the performance of the underlying ETFs.

Data Sources:

• First Trust Website
• ETFdb.com
• Morningstar

Disclaimers:

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