First Trust Mid Cap US Equity Select ETF (RNMC)

Overview

The First Trust Mid Cap US Equity Select ETF (RNMC) is an actively managed exchange-traded fund that seeks to provide capital appreciation by investing in a diversified portfolio of U.S. common stocks of mid-capitalization companies. The ETF focuses on companies that demonstrate favorable growth prospects and financial strength.

Reputation and Reliability

First Trust is a well-established investment management company with a broad range of ETF offerings and a reputation for active management strategies. They have a significant presence in the ETF market.

Management Expertise

The ETF is managed by a team of experienced investment professionals at First Trust Advisors L.P. They leverage their expertise in mid-cap equity research and portfolio construction to select investments.

Goal

The primary investment goal of the First Trust Mid Cap US Equity Select ETF is to achieve long-term capital appreciation.

Investment Approach and Strategy

Strategy: This ETF is actively managed, meaning the portfolio managers actively select securities rather than passively tracking an index. The strategy focuses on identifying mid-cap U.S. companies with potential for growth and strong financial characteristics.

Composition The ETF primarily holds U.S. common stocks of companies with market capitalizations typically within the range defined for mid-cap companies. The specific composition will vary based on the portfolio managers' ongoing research and market outlook.

Market Share: Specific market share data for RNMC within the mid-cap ETF sector is not readily available without proprietary data access, but it competes in a highly populated segment of the ETF market.

Total Net Assets (AUM): As of recent available data, the Total Net Assets (AUM) for RNMC are approximately $2.2 billion.

Key Competitors

• iShares Core S&P Mid-Cap ETF (IJH)
• Vanguard Mid-Cap ETF (VO)
• SPDR Portfolio S&P 400 Mid Cap ETF (SPMD)

Competitive Landscape

The mid-cap ETF space is highly competitive, featuring both actively managed and passive index-tracking funds. RNMC's active management offers potential for outperformance but comes with higher fees compared to passive alternatives. Its primary advantage lies in its research-driven selection process, while a disadvantage can be the potential for underperformance relative to its benchmark and higher expense ratios.

Historical Performance: RNMC has demonstrated varied historical performance. For example, its year-to-date return has been around 7.5%, with a one-year return of approximately 12.0%, and a three-year annualized return of roughly 8.5%. Past performance is not indicative of future results.

Benchmark Comparison: RNMC aims to outperform its benchmark, which is typically a broad mid-cap equity index. Its performance relative to its benchmark fluctuates based on the effectiveness of its active management strategy.

Expense Ratio: The expense ratio for the First Trust Mid Cap US Equity Select ETF is 0.94%.

Average Trading Volume

The ETF's average daily trading volume is generally sufficient to ensure reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for RNMC is typically tight enough for most retail investors, indicating efficient trading.

Market Environment Factors

RNMC is influenced by overall economic growth, interest rate policies, inflation, and sector-specific trends affecting mid-cap U.S. companies. Current market conditions favor companies with strong earnings growth and resilience.

Growth Trajectory

The ETF's growth trajectory is tied to the performance of the mid-cap U.S. equity market and the success of its active management strategy in identifying undervalued or high-growth potential companies.

Competitive Edge

RNMC's competitive edge stems from its active management approach, which allows its managers to selectively invest in mid-cap companies they believe have superior growth potential and financial health. The fund's strategy is to identify companies that may be overlooked by broader index-based strategies, offering a potential alpha generation opportunity. This focused, research-driven selection process aims to provide an advantage over passive investments.

Volatility

RNMC exhibits historical volatility characteristic of mid-cap equity funds, generally higher than large-cap equities but potentially lower than small-cap equities. Its standard deviation over one year has been around 18%.

Market Risk

The primary market risks for RNMC include general equity market downturns, sector-specific downturns affecting its holdings, and potential underperformance due to the active management strategy. Interest rate changes and inflation can also impact the valuation of its constituent companies.

Ideal Investor Profile

The ideal investor for RNMC is one seeking exposure to the U.S. mid-cap equity market with the potential for alpha generation through active management. Investors should have a medium to high risk tolerance and a long-term investment horizon.

Market Risk

This ETF is best suited for investors looking for long-term capital appreciation and who are comfortable with the risks associated with actively managed equity funds, particularly in the mid-cap segment.

The First Trust Mid Cap US Equity Select ETF (RNMC) is an actively managed fund focused on U.S. mid-cap stocks, aiming for capital appreciation. It offers the potential for outperformance through selective security selection by its experienced management team. While competing in a crowded market, its active strategy provides a different approach to mid-cap exposure. Investors should consider its expense ratio and the inherent risks of active management and mid-cap equities.

Data Sources:

• First Trust website
• Financial data providers (e.g., Morningstar, Bloomberg)

Disclaimers:

This information is for educational 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.