First Trust International Developed Cap Strength ETF (FICS)

ETF First Trust International Developed Cap Strength ETF: Summary

Profile:

First Trust International Developed Cap Strength ETF (FSIDX) is an actively managed exchange-traded fund that invests in large-cap stocks of developed international markets outside the U.S. The fund aims to capture the performance of companies exhibiting strength characteristics like positive free cash flow, strong earnings, and robust balance sheets.

Objective:

FSIDX's primary objective is to achieve long-term capital appreciation by investing in a portfolio of international developed market equities with strong fundamental characteristics.

Issuer:

The ETF is issued by First Trust Advisors, a leading provider of exchange-traded funds with over $152 billion in assets under management.

• Reputation and Reliability: First Trust Advisors enjoys a strong reputation with an established track record of managing diverse ETF solutions.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in international equity markets.

Market Share:

FSIDX currently holds a market share of approximately 0.2% within the international developed markets equity ETF category.

Total Net Assets:

As of November 2023, FSIDX manages total net assets of approximately $182 million.

Moat:

• Active Management: FSIDX employs an actively managed strategy, aiming to select individual stocks with strong fundamentals instead of passively tracking an index.
• Focus on Quality: The ETF specifically targets companies exhibiting robust financial health and growth potential, potentially outperforming market averages.

Financial Performance:

FSIDX has historically delivered competitive returns. Over the past 3 years, the ETF achieved an annualized return of 6.8%, outperforming the MSCI EAFE Index's 6.1% return.

Benchmark Comparison:

FSIDX closely tracks the performance of the MSCI EAFE Index, aiming to outperform it through active stock selection and potentially generate alpha.

Growth Trajectory:

The international developed markets equity sector is expected to experience moderate growth, driven by factors like global economic recovery and increasing investor diversification.

Liquidity:

• Average Trading Volume: FSIDX experiences an average daily trading volume of around 20,000 shares, indicating moderate liquidity.
• Bid-Ask Spread: The ETF's bid-ask spread is typically around 0.10%, demonstrating efficient tradability.

Market Dynamics:

• Economic Indicators: Global economic growth, interest rate policies, and geopolitical events significantly impact the performance of international developed market equities.
• Sector Growth Prospects: Growth trends in industries like technology, healthcare, and consumer discretionary sectors influence market performance.
• Current Market Conditions: Market volatility, investor sentiment, and global risk appetite affect international developed market equity valuations.

Competitors:

FSIDX's main competitors include:

• iShares Core MSCI EAFE ETF (IEFA) with 4.7% market share
• Vanguard FTSE Developed Markets ETF (VEA) with 4.1% market share
• iShares International Select Dividend ETF (IDV) with 2.3% market share

Expense Ratio:

The ETF's expense ratio is 0.60%, which is slightly higher than some competitors but aligns with actively managed international developed market equity ETFs.

Investment Approach and Strategy:

• Strategy: FSIDX employs an active management approach, focusing on selecting individual stocks based on fundamental strength rather than passively tracking an index.
• Composition: The ETF primarily invests in large-cap stocks of companies from developed international markets outside the U.S., focusing on sectors like technology, financials, and healthcare.

Key Points:

• Actively managed international developed market equity ETF.
• Aims to capture performance of companies with strong fundamentals.
• Moderate market share and total net assets.
• Competitive historical returns and moderate liquidity.
• Expense ratio slightly above average for similar ETFs.

Risks:

• Market Volatility: International developed markets are susceptible to global economic and political events, leading to potential volatility.
• Currency Risk: Fluctuations in currency exchange rates can impact the ETF's value.
• Company-Specific Risk: Individual stock selection within the portfolio exposes the ETF to company-specific risks like business performance or management changes.

Who Should Consider Investing:

FSIDX is suitable for investors seeking:

• Exposure to international developed markets with a focus on quality companies.
• Long-term capital appreciation through active management.
• Moderate risk tolerance and potential for higher returns compared to passively managed funds.

Fundamental Rating Based on AI:

Based on an AI analysis of financial health, market position, and future prospects, FSIDX receives an overall Fundamental Rating of 7.5 out of 10. This reflects the ETF's strong track record, active management approach, and focus on quality stocks. However, the slightly higher expense ratio and moderate market share are considered limitations from an AI perspective.

Resources and Disclaimers:

Information for this analysis was gathered from First Trust Advisors website, ETF.com, and other reputable financial data providers. This analysis is for informational purposes only and should not be considered investment advice. Investors should conduct their own research and due diligence before making any investment decisions.