First Trust Active Factor Small Cap ETF (AFSM)

Overview

The First Trust Active Factor Small Cap ETF (DFAS) is an actively managed ETF that seeks long-term capital appreciation by investing in a diversified portfolio of small-capitalization U.S. stocks. The fund employs a quantitative, rules-based methodology to select stocks based on factors such as value, momentum, quality, and volatility. It aims to outperform the Russell 2000 Index by actively managing its holdings.

Reputation and Reliability

First Trust is a well-established ETF provider with a strong reputation for innovation and specialized investment strategies.

Management Expertise

First Trust has a dedicated team of investment professionals with extensive experience in quantitative analysis and active management.

Goal

To provide long-term capital appreciation.

Investment Approach and Strategy

Strategy: The fund is actively managed and does not track a specific index. It uses a quantitative model to select stocks based on factor exposure.

Composition The ETF primarily holds small-cap U.S. stocks.

Market Share: The ETF's market share is relatively small compared to passively managed small-cap ETFs.

Total Net Assets (AUM): 71351844

Key Competitors

• IWM
• SLY
• VIOV
• AVUV

Competitive Landscape

The small-cap ETF market is highly competitive, dominated by passively managed index funds. DFAS differentiates itself through its active, factor-based approach. While active management offers the potential for outperformance, it also comes with higher fees and the risk of underperforming the benchmark.

Historical Performance: Historical performance data unavailable without real-time market information. A thorough analysis would involve looking at annual returns, standard deviation, and Sharpe ratio.

Benchmark Comparison: Benchmark comparison unavailable without real-time market information. Performance should be compared to the Russell 2000 Index.

Expense Ratio: 0.69

Average Trading Volume

The ETF's average trading volume is moderate, which can impact the ease of buying and selling shares. Trading volume depends on the market environment.

Bid-Ask Spread

The bid-ask spread varies depending on market conditions and trading volume, and can impact the cost of trading the ETF. It needs to be analyzed regularly as it is fluid.

Market Environment Factors

Economic growth, interest rates, inflation, and investor sentiment towards small-cap stocks influence DFAS's performance.

Growth Trajectory

The ETF's growth depends on its ability to attract assets through strong performance and effective marketing.

Competitive Edge

DFAS's competitive advantage lies in its active, factor-based approach to small-cap investing, which aims to deliver superior risk-adjusted returns. The fund's quantitative methodology and factor selection process provide a differentiated investment strategy. However, successful implementation and consistent outperformance are key to maintaining this advantage. Active management also increases the expense ratio compared to passive ETFs.

Volatility

Small-cap stocks are inherently more volatile than large-cap stocks, and DFAS's active management strategy can further influence its volatility.

Market Risk

DFAS is subject to market risk, meaning its value can fluctuate based on overall market conditions and investor sentiment towards small-cap stocks.

Ideal Investor Profile

DFAS is suitable for investors seeking long-term capital appreciation through exposure to small-cap stocks and who are comfortable with the risks associated with active management and factor-based investing.

Market Risk

DFAS is best suited for long-term investors who are willing to accept higher risk in exchange for the potential for higher returns.

The First Trust Active Factor Small Cap ETF (DFAS) is an actively managed ETF focusing on small-cap U.S. stocks, utilizing a quantitative, factor-based approach. It offers potential outperformance through active management, but at a higher expense ratio than passive ETFs. The fund is suitable for long-term investors comfortable with small-cap volatility and the risks associated with active investing. Its success depends on the effectiveness of its factor selection model and the fund's ability to attract assets through consistent performance. It operates in a competitive landscape dominated by passively managed funds.

• VBR
• IUSN
• AVUV
• XSMO
• PBSM
• SMLV
• DFAS

Data Sources:

• First Trust Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.