First Trust Advisors has announced that it has launched the FT Energy Income Partners Strategy ETF (NYSE Arca: EIPX).
The fund is managed and sub-advised by Energy Income Partners, LLC and seeks risk-adjusted total return by investing at least 80 per cent of its net assets (plus any borrowings for investment purposes) in a portfolio of equity securities in the broader energy market.
“The energy sector has been a bright spot in 2022, producing robust returns even as the broader equity market declined. In our opinion, the energy sector remains an attractive opportunity as global demand for fossil fuels may reach record levels over the next few years, even as supply remains relatively tight,” says Ryan Issakainen, CFA, Senior Vice President, and ETF Strategist at First Trust. “We believe EIPX offers a unique strategy for long-term investors, providing dynamic exposure to energy, actively-managed by a team with a deep understanding of the sector and a proven track record,” Issakainen said.
The fund’s portfolio is selected based upon EIP’s belief that a professionally managed portfolio of energy companies offers an attractive balance of income and growth through a combination of dividends and capital appreciation. EIP believes that the attractive characteristics of the energy business can be materially enhanced through a rigorous application of investment research and portfolio construction tools that incorporate their wide industry knowledge and the discipline to balance expected total returns among yield, growth and expected changes in valuation.
“Rapid changes to the energy industry over the last five years have created a wider range of opportunities for investors than in the past. Low-cost renewables, shale, government policies, and ESG pressures have widened valuation differentials between companies in the energy industry, and in many cases have changed management priorities. Capital discipline among the oil and gas producers today remains the most bullish development for investors, but the energy industry is always changing,” says John Tysseland, Co-Portfolio Manager and Principal of EIP. “EIPX is designed to evolve with these changes and invest in the best managed companies that are successfully navigating these changes,” Tysseland says.