First Trust Advisors is to launch an actively-managed exchange-traded fund (ETF), the First Trust Strategic Income ETF (DIV), which is expected to begin trading on The Nasdaq Stock Market on 14 August.
The fund’s primary investment objective is to seek risk-adjusted income. The fund’s secondary investment objective is capital appreciation.
The fund will seek to achieve its investment objectives using multiple investment categories, targeted investment strategies and specialised management teams.
“Finding ways to generate income for clients, while discerning the proper balance between income and risk, is one of the toughest challenges facing financial advisors today,” says Ryan Issakainen, senior vice president, exchange-traded fund strategist at First Trust. “This ETF may provide an alternative to traditional fixed-income funds, investing in a diversified group of income-producing fixed-income and equity asset classes, each actively-managed by a talented team of specialised asset managers.”
The fund’s multiple sources of income opportunities include high-yield bonds and senior loans, mortgage-related securities, preferred securities, international sovereign bonds, master limited partnerships (MLPs) and energy infrastructure companies, and dividend-paying equity securities. This broad scope of investments may act as a complement to traditional equity and fixed-income holdings.
For added portfolio diversification, the fund provides exposure to both domestic and international markets. Further, the fund’s equity holdings may provide additional growth potential when market conditions favour stocks.