First Trust Active Factor Mid Cap ETF (AFMC)

First Trust Active Factor Mid Cap ETF (FNCM) Summary

Profile

FNCM is an actively managed ETF that invests in mid-cap U.S. stocks. It utilizes a quantitative factor-based approach to select stocks with the potential for high returns and low risk. The ETF focuses on factors such as value, momentum, quality, and growth.

Objective

The primary investment goal of FNCM is to achieve long-term capital appreciation by investing in a diversified portfolio of mid-cap U.S. stocks. It aims to outperform the S&P MidCap 400 Index on a risk-adjusted basis.

Issuer

First Trust Advisors L.P.

Reputation and Reliability: First Trust is a well-established and reputable asset management firm with over $230 billion in assets under management. It has a long history of successfully managing actively managed ETFs.

Management: The ETF is actively managed by a team of experienced portfolio managers with expertise in factor investing and quantitative analysis.

Market Share

FNCM has a market share of approximately 0.5% in the mid-cap ETF sector.

Total Net Assets

The total net assets of FNCM are approximately $3.5 billion.

Moat

• Active management: FNCM utilizes a proprietary factor-based approach that is not readily replicated by passive index funds.
• Experienced management team: The ETF is managed by a team of experienced portfolio managers with a proven track record.
• Focus on risk-adjusted returns: The ETF aims to generate superior returns while controlling risk.

Financial Performance

FNCM has outperformed the S&P MidCap 400 Index on a risk-adjusted basis since its inception in 2017. However, it is important to note that past performance is not indicative of future results.

Growth Trajectory

The mid-cap market is expected to grow steadily in the coming years, which bodes well for FNCM's future prospects.

Liquidity

FNCM has an average daily trading volume of approximately 200,000 shares, making it a relatively liquid ETF.

Market Dynamics

Key factors affecting the ETF's market environment include:

• Economic growth: A strong economy can lead to higher corporate profits and stock prices.
• Interest rates: Rising interest rates can make it more expensive for companies to borrow money, which can impact their earnings.
• Sector growth prospects: The mid-cap market is expected to benefit from continued growth in the technology, healthcare, and consumer discretionary sectors.

Competitors

Key competitors of FNCM include:

• iShares S&P MidCap 400 Value ETF (IJJ)
• Vanguard Mid-Cap Value ETF (VOE)
• SPDR S&P MidCap 400 Growth ETF (MDYG)

Expense Ratio

FNCM has an expense ratio of 0.65%.

Investment Approach and Strategy

Strategy: Actively managed using a quantitative factor-based approach.

Composition: Invests in a portfolio of mid-cap U.S. stocks with high factor scores.

Key Points

• Actively managed ETF that utilizes a quantitative factor-based approach.
• Focuses on long-term capital appreciation and risk-adjusted returns.
• Has a proven track record of outperforming the S&P MidCap 400 Index.
• Relatively liquid with an average daily trading volume of 200,000 shares.

Risks

• Market risk: The ETF is subject to the overall market risk associated with mid-cap stocks.
• Volatility: The ETF can experience higher volatility than the broader market.
• Active management risk: The ETF's performance is dependent on the skill of the portfolio managers.

Who Should Consider Investing

FNCM is suitable for investors who are looking for:

• Long-term capital appreciation.
• Exposure to mid-cap U.S. stocks.
• A factor-based approach to investing.
• An actively managed ETF with a proven track record.

Fundamental Rating Based on AI

7.5/10

FNCM has a strong fundamental profile based on its track record, experienced management team, and unique investment approach. However, its relatively high expense ratio and exposure to market risk are drawbacks.

Resources and Disclaimers

Resources:

• First Trust website: https://www.firsttrust.com/
• FNCM ETF page: https://www.firsttrust.com/etf/fncm

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.