First Trust Active Factor Small Cap ETF (AFSM)

Overview

The First Trust Active Factor Small Cap ETF (DFAS) seeks long-term capital appreciation by investing in a diversified portfolio of small-capitalization U.S. equities. The fund employs an active management strategy that uses a quantitative model to identify and select stocks based on factors such as value, momentum, and quality.

Reputation and Reliability

First Trust is a well-established and reputable ETF provider known for its innovative and factor-based investment strategies.

Management Expertise

First Trust's management team has extensive experience in quantitative investing and factor-based strategies, providing a solid foundation for the fund's active approach.

Goal

To seek long-term capital appreciation.

Investment Approach and Strategy

Strategy: The ETF utilizes an active management strategy based on a quantitative model.

Composition The ETF primarily holds small-cap U.S. equities.

Market Share: DFAS's market share within the active small-cap ETF segment is moderate, indicating a presence but not dominance.

Total Net Assets (AUM): 295100000

Key Competitors

• Avantis U.S. Small Cap Value ETF (AVUV)
• Dimensional U.S. Small Cap ETF (DFAS)
• Vanguard Small-Cap Value ETF (VBR)

Competitive Landscape

The small-cap ETF market is competitive, with a mix of active and passive funds. DFAS competes with other factor-based and actively managed small-cap funds. DFAS's advantage lies in its specific factor combination and active management, while disadvantages include higher expense ratio compared to passive funds and the risk of underperforming the benchmark.

Historical Performance: Historical performance data unavailable in requested format.

Benchmark Comparison: Performance comparison to benchmark unavailable in requested format.

Expense Ratio: 0.69

Average Trading Volume

The average trading volume of DFAS is moderate, which may impact the ease of buying or selling large blocks of shares.

Bid-Ask Spread

The bid-ask spread is typically small, reflecting sufficient liquidity for most investors.

Market Environment Factors

Economic indicators, small-cap market performance, and factor-based investing trends influence DFAS's performance. Favorable conditions for value, momentum, and quality factors can positively impact returns.

Growth Trajectory

DFAS's growth is tied to its ability to consistently deliver alpha through its active factor-based strategy. Changes in the quantitative model and portfolio holdings can affect its performance.

Competitive Edge

DFAS's competitive advantage stems from its active management and factor-based approach within the small-cap universe. The fund's quantitative model aims to identify stocks with attractive value, momentum, and quality characteristics. First Trust's expertise in factor-based investing and active management provides a differentiated offering. The active approach allows for flexibility in navigating market conditions and potentially outperforming passive benchmarks. However, success depends on the model's effectiveness and the management team's ability to execute the strategy.

Volatility

DFAS, being a small-cap fund, is expected to exhibit higher volatility compared to large-cap funds.

Market Risk

The primary market risk is the inherent volatility of small-cap stocks, which can be sensitive to economic downturns and changes in investor sentiment.

Ideal Investor Profile

DFAS is suitable for investors seeking long-term capital appreciation through exposure to small-cap stocks with a factor-based approach and are comfortable with higher volatility.

Market Risk

DFAS is best suited for long-term investors who understand the risks associated with small-cap investing and active management.

First Trust Active Factor Small Cap ETF (DFAS) is an actively managed ETF focusing on small-cap U.S. equities, using a quantitative model to select stocks based on value, momentum, and quality factors. It aims to outperform passive small-cap benchmarks, but carries a higher expense ratio. The fund is suitable for long-term investors seeking capital appreciation and comfortable with higher volatility. Its performance depends on the effectiveness of the active management strategy and factor selection model. Investors should carefully consider their risk tolerance and investment objectives before investing.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Investment decisions should be based on individual circumstances and consultation with a qualified financial advisor.