First Trust Advisors has launched a new actively managed exchange-traded fund (ETF) designed to give investors exposure primarily to investment grade bonds.
The First Trust TCW Opportunistic Fixed Income ETF (Nasdaq: FIXD) (the “fund”) seeks to maximise long-term total return using a value driven approach. The fund is sub-advised and managed by TCW Investment Management Company (TCW).
The fund is a multi-sector portfolio that provides exposure to core and satellite fixed income assets. Under normal market conditions, the fund will seek to achieve its investment objective by investing at least 80% of its net assets (including investment borrowings) in fixed income securities of any credit quality and may invest up to 35% of its net assets in securities rated below investment grade.
“TCW takes a very careful and deliberate approach to new product development, and we could not be more pleased to launch this fund with an industry-leading partner like First Trust,” says Steve Kane, Portfolio Manager at TCW. “Given the increased market demand for actively managed fixed income ETFs, we believe this offering will provide another means for investors to access our team-based, value approach to managing fixed income portfolios.”
Unlike passive indexing strategies, TCW’s active approach focuses on generating alpha primarily through sector allocation and security selection. The investment process comprises additional strategies including careful duration management, yield curve positioning and opportunistic trade execution. The result is a portfolio that is diversified not only in a traditional sense across maturities, sectors and securities, but also across strategies that provide the opportunity to seek higher risk-adjusted returns.
TCW’s fixed income management philosophy reflects a goal of consistently outperforming the broader bond market over full market cycles while maintaining below average volatility with an emphasis on capital preservation, particularly in rising interest rate environments.
“We believe fixed income markets provide significant opportunities for active managers to add value,” says Ryan Issakainen, CFA, Senior Vice President and ETF Strategist for First Trust. “TCW is a world class institutional investment manager, and we’re thrilled to offer this core, fixed-income ETF.”
The fund’s portfolio management team from TCW includes Tad Rivelle, Chief Investment Officer, Co-Director – Fixed Income, Portfolio Manager; Laird Landmann, Co-Director – Fixed Income, Portfolio Manager; Stephen M. Kane, CFA, Portfolio Manager; and Bryan T Whalen, CFA, Portfolio Manager. The portfolio managers are jointly responsible for the day-to-day management of the fund.
