First Trust Advisors has launched two new ETFs, the Multi-Asset Diversified Income Index Fund and the First Trust Nasdaq Technology Dividend Index Fund.
The Multi-Asset Diversified Income Index Fund seeks investment results that correspond generally to the price and yield (before the fund’s fees and expenses) of the Nasdaq Multi-Asset Diversified Income Index.
The fund provides exposure to a diversified mixture of asset classes within a single investment portfolio, and the portfolio is further diversified within each asset class. As a result, the fund provides the potential for a lower-risk total return alternative to investing solely in one asset class, and since income is generated from multiple sources, the fund may provide less interest-rate sensitivity than traditional fixed income securities.
The fund’s underlying index includes volatility screens designed to limit securities that have high yields strictly due to poor price performance, and the index is rebalanced in every quarter. The index is comprised of domestic and international dividend-paying stocks, real estate investment trusts, master limited partnerships, preferred securities and an ETF that invests in high-yield corporate bonds. Every asset class has its own set of eligibility criteria, and every security in the index is US-listed and meets stringent eligibility criteria based on liquidity, size, volatility and yield.
“With interest rates at historically low levels, income investors have been seeking yield from alternative sources, including multi-asset income investing,” says Robert Carey, chief market strategist at First Trust. “In our opinion, the Multi-Asset Diversified Income Index Fund is a disciplined and transparent solution for income investors that seeks to provide income generation, diversification and the potential for reduced volatility in a very challenging market.”
The First Trust Nasdaq Technology Dividend Index Fund seeks investment results corresponding generally to the price and yield (before the fund’s fees and expenses) of the Nasdaq Technology Dividend Index. The fund provides a simplified way to gain targeted access to dividend-paying technology companies.
All securities included in the Nasdaq Technology Dividend Index must be listed on the Nasdaq Stock Market, New York Stock Exchange or NYSE Amex and classified as technology or telecommunications companies according to the Industry Classification Benchmark.
“Given that internet usage and demand for products such as mobile phones, semiconductors and computer devices are growing rapidly, and the technology industry’s dividend growth rate has outpaced all other sectors over the past seven years, we believe this is an ideal time to invest in the technology field,” says Ryan Issakainen, ETF strategist at First Trust.
