First Trust Exchange-Traded Fund VIII - First Trust Multi-Manager Large Growth ETF (MMLG)

Overview

The First Trust Multi-Manager Large Growth ETF (FADG) is an actively managed ETF that seeks long-term growth by investing in a portfolio of large-cap U.S. growth stocks, selected by multiple sub-advisors using diverse investment styles. It offers exposure to established companies with growth potential, aiming for capital appreciation rather than income.

Reputation and Reliability

First Trust is a well-established ETF provider with a reputation for innovation and a broad range of investment products.

Management Expertise

First Trust employs a multi-manager approach, leveraging the expertise of several sub-advisors with distinct investment styles to enhance diversification and potentially improve performance.

Goal

The primary investment objective of FADG is to seek long-term capital appreciation.

Investment Approach and Strategy

Strategy: FADG is actively managed and does not track a specific index. The fund employs a multi-manager approach, allocating assets among various sub-advisors who use their own distinct growth-oriented strategies to select securities.

Composition FADG primarily holds equity securities of large-cap U.S. companies exhibiting growth characteristics. It does not invest in bonds or commodities.

Market Share: FADG's market share within the large-cap growth ETF segment is moderate, as this segment is dominated by passive index funds.

Total Net Assets (AUM): 143000000

Key Competitors

• Vanguard Growth ETF (VUG)
• iShares Russell 1000 Growth ETF (IWF)
• Schwab U.S. Large-Cap Growth ETF (SCHG)

Competitive Landscape

The large-cap growth ETF market is highly competitive, dominated by low-cost, passively managed index funds. FADG differentiates itself through its active, multi-manager approach, which aims to outperform the index through stock selection. However, this active management comes with a higher expense ratio compared to its passive peers, which may be a disadvantage if it does not generate superior returns.

Historical Performance: Historical performance data is required from reliable financial sources.

Benchmark Comparison: Benchmark comparison data is needed for appropriate analysis.

Expense Ratio: 0.77

Average Trading Volume

The average trading volume for FADG is moderate, indicating adequate liquidity for typical trading activity.

Bid-Ask Spread

The bid-ask spread for FADG is generally competitive, reflecting sufficient market interest and efficient trading.

Market Environment Factors

FADG's performance is influenced by economic growth, interest rate changes, technological innovation, and investor sentiment towards growth stocks.

Growth Trajectory

The growth trajectory of FADG depends on the success of its multi-manager approach in identifying and selecting high-growth large-cap companies. Changes in manager allocation or investment strategy may impact its future performance.

Competitive Edge

FADGu2019s competitive advantage lies in its multi-manager approach, which aims to diversify investment styles and enhance stock selection. This approach allows the fund to potentially capture different growth opportunities and adapt to changing market conditions more effectively than single-manager funds. The selection process, which is managed by multiple experts in their field, hopes to allow for superior performance over a long time horizon, but carries increased management costs.

Volatility

FADG's volatility is expected to be comparable to other large-cap growth ETFs, potentially higher than the overall market due to its focus on growth stocks.

Market Risk

FADG is exposed to market risk, particularly the risk associated with large-cap growth stocks. Economic downturns, sector-specific challenges, and changes in investor sentiment can negatively impact the fund's performance.

Ideal Investor Profile

The ideal investor for FADG is one who seeks long-term capital appreciation and is willing to accept moderate to high levels of volatility associated with growth stocks. Investors should be comfortable with active management and understand the higher expense ratio compared to passive ETFs.

Market Risk

FADG is best suited for long-term investors seeking growth potential and diversification within the large-cap equity market. It may not be suitable for risk-averse investors or those seeking current income.

The First Trust Multi-Manager Large Growth ETF (FADG) is an actively managed fund offering exposure to a diversified portfolio of large-cap U.S. growth stocks. Its multi-manager approach aims to enhance returns, but comes at a higher expense ratio than passive alternatives. It suits long-term investors seeking capital appreciation and can tolerate moderate to high volatility. Success depends on the effectiveness of sub-advisors' stock selection and market conditions favoring growth investments. FADG presents a viable option for investors seeking active management in the large-cap growth space, as long as they are fully aware of the risk and costs involved.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

This analysis is for informational purposes only and does not constitute investment advice. Investment decisions should be made based on individual circumstances and consultation with a qualified financial advisor. Data is based on available information and may be subject to change.