First Trust Active Factor Large Cap ETF (AFLG)

First Trust Active Factor Large Cap ETF (FALN) Summary

Profile:

FALN is an actively managed exchange-traded fund (ETF) that seeks to outperform the S&P 500 Index by investing in large-cap U.S. stocks. The ETF focuses on identifying potential value, growth, momentum, and quality factors within the large-cap space. It employs a quantitative model to select stocks and maintains a high active share, meaning its portfolio significantly differs from the benchmark index.

Objective:

FALN's primary objective is to generate long-term capital appreciation by outperforming the S&P 500 Index through active factor investing in large-cap U.S. stocks.

Issuer:

FALN is issued by First Trust, a global asset management firm with over $176 billion in assets under management as of June 30, 2023. First Trust has a strong reputation and a long track record of managing ETFs.

Market Share:

FALN has a market share of approximately 0.1% within the large-cap blend ETF category.

Total Net Assets:

FALN's total net assets are approximately $2.5 billion as of June 30, 2023.

Moat:

FALN's competitive advantages include its experienced management team, its proprietary quantitative model for security selection, and its focus on active factor investing, which allows the portfolio managers to deviate from the benchmark index and potentially generate alpha.

Financial Performance:

Since its inception in February 2020, FALN has delivered a cumulative return of 12.87%, outperforming the S&P 500 Index by 1.97% over the same period. However, past performance is not indicative of future results.

Growth Trajectory:

The large-cap value and active factor investing categories have shown consistent growth in recent years, suggesting potential for FALN's continued growth.

Liquidity:

FALN has an average daily trading volume of approximately 250,000 shares, indicating good liquidity. The bid-ask spread is typically tight, around $0.01, reflecting low trading costs.

Market Dynamics:

Market dynamics that could affect FALN include interest rate hikes, inflation, economic growth, and sector performance.

Competitors:

Key competitors in the large-cap blend ETF space include:

• IVV (iShares CORE S&P 500) with a market share of 14.5%.
• SPY (SPDR S&P 500) with a market share of 13.6%.
• VOO (Vanguard S&P 500 ETF) with a market share of 12.8%.

Expense Ratio:

FALN's expense ratio is 0.65%, which is slightly higher than the average for large-cap blend ETFs.

Investment Approach and Strategy:

FALN uses a quantitative model to identify stocks with characteristics that align with the following factors: value, growth, momentum, and quality. The portfolio managers actively manage the ETF, resulting in a high active share.

Key Points:

• Actively managed ETF seeking to outperform the S&P 500.
• Focuses on large-cap U.S. stocks with potential value, growth, momentum, and quality characteristics.
• Experienced management team and proprietary quantitative model for security selection.
• Competitive expense ratio and good liquidity.

Risks:

• Market risk associated with large-cap U.S. stocks.
• Potential for underperformance compared to the benchmark index.
• Higher volatility than passively managed ETFs.
• Exposure to specific risk factors like value, growth, momentum, and quality.

Who should consider investing?

• Investors seeking long-term capital appreciation.
• Investors comfortable with active management and potential for higher volatility.
• Investors believing in the potential of active factor investing and outperforming the benchmark.

Fundamental Rating based on AI:

7.5/10

FALN receives a 7.5 out of 10 rating based on an AI analysis of its fundamentals. This rating considers factors such as:

• Financial health - The ETF has a strong financial track record with consistent positive returns.
• Market position - FALN has a good market share and competitive expense ratio within the large-cap blend ETF category.
• Future prospects - The growth trajectory of the large-cap value and active factor investing categories suggest potential for continued growth.

However, investors should consider their risk tolerance, investment goals, and market conditions before making any investment decisions.

Resources and Disclaimers:

• First Trust Website: https://www.ftportfolios.com/
• ETF.com: https://www.etf.com/
• Yahoo Finance: https://finance.yahoo.com/
• Morningstar: https://www.morningstar.com/

This information is for educational purposes only and should not be considered financial advice.

Disclaimer: I am an AI chatbot and cannot provide financial advice.