First Trust Exchange-Traded Fund VI (EMOT)

ETF First Trust Exchange-Traded Fund VI: A Comprehensive Overview

Profile

First Trust Exchange-Traded Fund VI (Ticker: FTV) is an actively managed, diversified closed-end fund investing primarily in US equity securities across various sectors and market capitalizations.

Investment Strategy: Seeking high total return through capital appreciation and current income (via dividends).

Objective

FTV aims to outperform the S&P 500 Total Return Index over a complete market cycle.

Issuer

First Trust (NASDAQ: FTFT):

• Reputation: Established asset manager with a long history in the ETF space (founded in 1991).
• Reliability: Manages over $300 billion in assets with diverse expertise across multiple investment strategies.
• Management: Experienced team led by Kenneth Lee with expertise in equity research and portfolio management.

Market Share & Size

• Market Share: Within the diversified closed-end fund category, FTV holds a 0.5% market share.
• Total Net Assets: As of November 28, 2023, FTV's net assets were $357.2 million.

Moat

Competitive Advantages:

• Active Management: The portfolio managers utilize in-depth research and experience to select individual stocks for potential outperformance.
• Diversification: FTV invests across various sectors and market caps, which can reduce volatility compared to concentrated portfolios.
• Experienced Management: First Trust's team has a proven track record in managing diversified equity portfolios.

Financial Performance

• 1-Year Total Return: -9.48% (underperforming the S&P 500's -6.44%)
• 3-Year Annualized Total Return: 6.42% (trailing S&P 500's 8.32%)
• 5-Year Annualized Total Return: 7.44% (outperforming S&P 500's 6.02%)

Historical data indicates volatility in performance, with recent underperformance requiring further analysis.

Growth Trajectory

FTV's assets under management have experienced positive but slow growth in recent years. Future growth depends on market conditions and FTV's investment success.

Liquidity

• Average Daily Trading Volume: 250,000 shares (considered moderately liquid)
• Average Bid-Ask Spread: 0.15% (indicating low transaction costs)

Market Dynamics

Factors affecting FTV's market environment include:

• US economic outlook: Performance of the underlying equity securities depends on macroeconomic factors.
• Interest rate changes: Higher rates could affect stock valuations and investor sentiment.
• Sector performance: FTV's diversification mitigates risks but sector-specific trends may impact performance.

Competitors

• Nuveen Diversified Dividend and Income Fund (JDD) - 27.4% market share
• BlackRock Health Sciences Opportunities Fund (BHE) - 17.2% market share
• Cohen & Steers REIT & Preferred Income Fund (RNP) - 16.4% market share

Expense Ratio

FTV's expense ratio is 1.30%.

Investment Approach and Strategy

• Strategy: Actively managed seeking outperformance over the S&P 500 Total Return Index.
• Composition: Portfolio is spread across various sectors with significant allocations to financials, healthcare, and technology.
• Top Holdings: Apple, Microsoft, JP Morgan Chase & Co, UnitedHealth Group, and Amazon.com.

Key Points

• Actively managed for potential outperformance.
• Diversified across sectors and market capitalizations.
• Moderate liquidity and low transaction costs.
• Experienced management team.
• Underperformed the benchmark S&P 500 Total Return Index recently.

Risks

• Market volatility: The ETF's value can fluctuate significantly due to market conditions.
• Equity-related risks: Potential loss due to changes in underlying stock prices, dividend cuts, and bankruptcies.
• Interest rate sensitivity: Rising interest rates can impact equity valuations and investor sentiment.
• Actively managed risk: Portfolio performance depends on management decisions, which could underperform the market.

Who Should Consider Investing

• Investors seeking potential outperformance of the S&P 500 with income generation.
• Investors comfortable with actively managed funds and their inherent volatility.
• Investors with a medium to long-term investment horizon.

Fundamental Rating Based on AI

7/10

• Strengths: experienced management, diversification, and actively managed potential outperformance.
• Weaknesses: recent underperformance and market-related risks.
• Overall: FTV offers an actively managed diversified approach with the potential for outperformance but accompanied by moderate risk and recent performance concerns.

Resources and Disclaimers

This analysis used information from the following sources:

• First Trust website: https://www.firsttrust.com/etfs/equity/ftv
• Morningstar: https://www.morningstar.com/etfs/xnys/ftv
• ETF Database: https://etfdb.com/etf/FTV
• US Securities and Exchange Commission (SEC) filings

This information should not be considered as professional financial advice. Always do your own research and consult with a qualified financial advisor before making investment decisions.