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

Overview

The First Trust Multi-Manager Large Growth ETF (LMHG) is an actively managed exchange-traded fund that seeks capital appreciation by investing in a diversified portfolio of large-capitalization growth stocks. The ETF employs a multi-manager approach, allocating assets to sub-advisors with distinct investment styles within the large-cap growth universe. Its primary focus is on companies exhibiting strong earnings growth, innovative products or services, and significant market potential.

Reputation and Reliability

First Trust is a well-established ETF provider with a broad range of innovative and actively managed strategies. They are known for their diverse product offerings and consistent track record in the ETF industry.

Management Expertise

The ETF utilizes a multi-manager structure, leveraging the expertise of several experienced investment management firms. Each sub-advisor brings a specialized approach to identifying and selecting large-cap growth stocks, aiming to achieve alpha generation through active management.

Goal

The primary investment goal of the First Trust Multi-Manager Large Growth ETF is to achieve long-term capital appreciation.

Investment Approach and Strategy

Strategy: The ETF is actively managed and does not track a specific index. It aims to outperform relevant large-cap growth benchmarks by allocating capital to multiple sub-advisors who employ their own distinct strategies for stock selection.

Composition The ETF primarily holds a diversified portfolio of equity securities, specifically large-capitalization growth stocks. The allocation among sub-advisors and the specific holdings within each sub-advisor's portfolio can vary based on market conditions and their respective investment philosophies.

Market Share: Information on precise market share for individual ETFs can be dynamic and is often proprietary. For a niche actively managed ETF like LMHG, its market share would be relatively small compared to broad-market index ETFs.

Total Net Assets (AUM): 1850000000.0

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 space is highly competitive, dominated by passive index-tracking ETFs that offer lower expense ratios. LMHG's competitive advantage lies in its multi-manager, actively managed approach, which aims to provide alpha generation. However, this active management comes with a higher expense ratio, potentially deterring some investors. Its disadvantages include the inherent risks of active management and the potential for underperformance relative to its passive counterparts.

Historical Performance: Historical performance data for LMHG shows a mixed track record, with periods of outperformance and underperformance relative to its benchmark. It aims to provide growth through active stock selection across different sub-advisors.

Benchmark Comparison: LMHG is benchmarked against the Russell 1000 Growth Index. Its performance relative to this benchmark varies depending on market conditions and the effectiveness of the sub-advisors' strategies.

Expense Ratio: 0.85

Average Trading Volume

The ETF exhibits moderate average trading volume, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for LMHG is generally competitive, reflecting its status as a reasonably liquid ETF with active trading.

Market Environment Factors

LMHG is influenced by factors affecting the broader equity market, particularly the technology and growth sectors. Economic indicators like interest rates, inflation, and corporate earnings growth significantly impact its performance. Technological innovation and consumer spending trends are also key drivers.

Growth Trajectory

As an actively managed ETF, its growth trajectory is dependent on the ongoing effectiveness of its multi-manager strategy. Changes to sub-advisors or shifts in their investment strategies can influence its future performance and holdings.

Competitive Edge

LMHG's competitive edge stems from its multi-manager structure, which diversifies investment talent and strategies within the large-cap growth segment. This approach aims to capture alpha through active selection, potentially offering superior returns compared to passive options. The active management allows for flexibility to adapt to changing market conditions and exploit specific growth opportunities that might be overlooked by a static index.

Volatility

LMHG's historical volatility is generally in line with that of other large-cap growth equity ETFs, reflecting the inherent price fluctuations of growth stocks. It can experience higher volatility during market downturns.

Market Risk

The primary market risks associated with LMHG include general equity market risk, sector-specific risks (especially within technology and consumer discretionary), and the risk of underperformance by its sub-advisors. Concentration in growth-oriented companies can also lead to higher volatility.

Ideal Investor Profile

The ideal investor for LMHG is one seeking long-term capital appreciation, comfortable with the higher risk associated with growth stocks, and who believes in the potential of actively managed strategies to outperform. Investors should also be aware of and accept the higher expense ratio compared to passive ETFs.

Market Risk

LMHG is best suited for long-term investors who are looking for actively managed exposure to the large-cap growth segment of the market and are willing to accept the associated risks and fees for the potential of enhanced returns.

The First Trust Multi-Manager Large Growth ETF (LMHG) is an actively managed fund seeking long-term capital appreciation by investing in large-cap growth stocks through a multi-manager approach. It leverages the expertise of various sub-advisors to identify growth opportunities. While offering potential for alpha generation, it carries higher expenses and risks compared to passive ETFs. Its performance is tied to market dynamics and the effectiveness of its diverse management team.

Data Sources:

• First Trust official website
• Financial data aggregators (e.g., Morningstar, Yahoo Finance)

Disclaimers:

This information is for illustrative purposes only and does not constitute investment advice. ETF performance can vary, and investors should conduct their own due diligence before making any investment decisions. Market share data is estimated and can fluctuate.