First Trust Active Factor Mid Cap ETF (AFMC)

Overview

The First Trust Active Factor Mid Cap ETF (AFSM) is an actively managed ETF that seeks long-term capital appreciation by investing in mid-capitalization U.S. companies, employing a quantitative, rules-based approach to select securities with attractive value, momentum, quality, and volatility characteristics.

Reputation and Reliability

First Trust is a well-established ETF provider with a strong reputation for innovative and specialized investment products.

Management Expertise

First Trust has a dedicated team of investment professionals with experience in quantitative analysis and active portfolio management.

Goal

To seek long-term capital appreciation.

Investment Approach and Strategy

Strategy: The ETF does not track a specific index but uses a proprietary quantitative model to select and weight stocks based on factor scores.

Composition The ETF primarily holds common stocks of mid-capitalization U.S. companies.

Market Share: AFSM's market share within the mid-cap blend ETF category is relatively small compared to passively managed index funds.

Total Net Assets (AUM): 63430000

Key Competitors

• IJH
• VO
• IWR
• MDY

Competitive Landscape

The mid-cap ETF market is dominated by passively managed, index-tracking funds. AFSM differentiates itself through its active management and factor-based approach, potentially offering higher returns but also incurring higher expenses. Advantages include the potential to outperform the index, while disadvantages include higher fees and the risk of underperformance.

Historical Performance: Historical performance data should be retrieved from financial data providers. (e.g., 1 year: [performance], 3 year: [performance], 5 year: [performance])

Benchmark Comparison: Performance should be compared against a relevant mid-cap index such as the S&P MidCap 400 Index.

Expense Ratio: 0.6

Average Trading Volume

AFSM's average trading volume is moderate, which can impact trading costs for larger orders.

Bid-Ask Spread

The bid-ask spread is typically modest, but it can widen during periods of market volatility.

Market Environment Factors

AFSM's performance is influenced by factors such as economic growth, interest rates, inflation, and sector-specific trends within the mid-cap market.

Growth Trajectory

Growth depends on the fund's ability to consistently select stocks that outperform the market, as well as the overall growth of the mid-cap segment. There are no expected changes to the strategy.

Competitive Edge

AFSM's competitive edge lies in its active, factor-based approach, which aims to generate alpha by systematically identifying and investing in undervalued mid-cap companies with strong momentum, quality, and low volatility characteristics. The fund's quantitative model provides a disciplined and repeatable investment process, which can potentially lead to consistent outperformance over time. However, the success of the strategy depends on the accuracy and effectiveness of the model. The fund benefits from First Trust's established reputation.

Volatility

Volatility should be assessed using historical data and compared to relevant benchmarks.

Market Risk

AFSM is subject to market risk, meaning its value can fluctuate due to broader market movements and economic conditions. Specific risks include sector concentration and potential stock-specific risks.

Ideal Investor Profile

AFSM is suitable for investors seeking long-term capital appreciation with a moderate to high risk tolerance. Investors who believe in active management and factor-based investing may find AFSM appealing.

Market Risk

AFSM is best suited for long-term investors who are comfortable with the risks and potential rewards of active management.

The First Trust Active Factor Mid Cap ETF (AFSM) offers exposure to mid-capitalization U.S. equities through an actively managed, factor-based approach. Its objective is to achieve long-term capital appreciation by employing a proprietary quantitative model to select stocks exhibiting attractive value, momentum, quality, and volatility characteristics. While the fund benefits from First Trust's reputation and a disciplined investment process, investors should be aware of its higher expense ratio and the inherent risks of active management. AFSM is most appropriate for investors seeking a potentially higher return with a higher risk, suitable for long-term investments.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Investors should consult with a qualified financial advisor before making any investment decisions. Market share data is based on available data and may not be precise.