ETF provider First Trust Advisors has launched a new actively managed ETF, the First Trust Multi-Manager Small Cap Opportunities ETF (NYSE Arca: MMSC).
The fund seeks to provide long-term capital appreciation by investing in equity securities issued by small capitalisation companies.
The fund’s portfolio is managed by First Trust Advisors, with the First Trust Investment Committee handling the selection and ongoing monitoring of the securities in the fund’s portfolio. The First Trust Investment Committee is responsible for selecting and overseeing the sub-advisors. The assets of the fund will be initially allocated between two sub-advisors: Driehaus Capital Management LLC and Stephens Investment Management Group, LLC. Through the blending of multiple portfolio management teams, First Trust seeks to provide idiosyncratic profiles that complement each other.
“We are thrilled to work with best-in-class small cap managers, each of which has demonstrated a long-term history of success by employing distinct, complementary investment philosophies,” says Ryan Issakainen, CFA, Senior Vice President, ETF Strategist at First Trust.
The firm writes that a multi-manager approach combines the potential advantages of an actively managed portfolio with the added potential benefit of diversified expertise from multiple asset management firms, each of whom offers its own experience, philosophy and strategy for investing in equity securities issued by small capitalisation companies.
“By combining different small-cap growth strategies that have the potential to perform well in different market environments, this ETF seeks to produce more consistent alpha over time,” says Issakainen.