Bringing you live news and features since 2006 

First Trust launches long/short equity ETF

RELATED TOPICS​

First Trust Advisors has launched a new actively-managed exchange-traded fund (ETF), the First Trust Long/Short Equity ETF, providing investors with long-term total return.

The fund’s investment process involves constructing both a long and short portfolio consisting of at least 80 per cent in US exchange-listed equity securities of US and foreign companies such as common stocks and ETFs.
 
Earnings quality is a central component of security selection for the fund using Sabrient Systems’ and Gradient Analytics’ Earnings Quality Rank (EQR). EQR is a proprietary forensic accounting methodology that measures the aggressiveness of accounting for each company. Research by Sabrient Systems and Gradient Analytics suggests that aggressive accounting practices (low quality earnings) are associated with lower future stock returns compared to those companies with more conservative accounting practices (higher quality earnings). The methodology seeks to identify those companies that have potential to outperform or underperform the market.
 
The fund seeks to systematically provide long exposure to high quality earnings stocks and short exposure to lower quality earnings stocks. The overall portfolio, under normal market conditions, will be 80 to 100 per cent invested in long positions and zero per cent to 50 per cent invested in short positions.
 
“Long-short offers the opportunity to profit from both the long positions as well as the short positions,” says John Gambla, senior portfolio manager at First Trust, who serves as one of the fund’s portfolio managers. “A further potential benefit is that the long and short exposures may serve to offset one another and thereby have the total portfolio be less dependent on market direction than a long only fund.”
 
The portfolio is overseen by the First Trust Advisors investment committee. Along with Gambla, Rob A Guttschow, senior portfolio manager at First Trust, serves as portfolio manager of the fund. The two are responsible for day-to-day management decisions for the fund’s portfolio.

Latest News

Figment Europe, a provider of institutional staking infrastructure, writes that it is solidifying its presence in the heart of Europe’s..
Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..

Related Articles

Sal Esposito, Zacks Investment Management
Zacks Investment Management started doing investment research in 1978 and in 1992 started its investment management arm, initially with SMAs...
Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
Graham MacKenzie, Toronto Stock Exchange
The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded...
Frank Koudelka, State Street Global Services
ETF data provider and ETF Express data partner, Trackinsight, has published its Global ETF Survey 2024 Report: ‘50+ Charts on...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by