First Trust Managed Futures Strategy Fund (FMF)

Overview

The First Trust Managed Futures Strategy Fund (FUT) seeks to provide long-term capital appreciation by investing in a portfolio of managed futures strategies through a wholly-owned subsidiary. It offers exposure to various commodity and financial futures markets, aiming to capitalize on price trends.

Reputation and Reliability

First Trust is a well-established investment firm known for its diverse ETF offerings and generally reliable fund management.

Management Expertise

First Trust has a dedicated team of investment professionals experienced in alternative investment strategies, including managed futures.

Goal

To provide long-term capital appreciation.

Investment Approach and Strategy

Strategy: The fund invests in a wholly-owned subsidiary that implements a managed futures strategy, which involves taking long and short positions in various futures contracts.

Composition The ETF primarily holds investments in a wholly-owned subsidiary and cash. The subsidiary actively manages a portfolio of futures contracts on various asset classes, including commodities, currencies, and interest rates.

Market Share: Difficult to quantify precisely as 'managed futures' is broad; FUT is a significant player in its specific managed futures strategy execution.

Total Net Assets (AUM): 680000000

Key Competitors

• WisdomTree Managed Futures Strategy Fund (WDTI)
• iMGP DBi Managed Futures Strategy ETF (DBMF)
• KFA Mount Lucas Index Strategy ETF (KMLM)

Competitive Landscape

The managed futures ETF market is becoming more competitive. FUT offers a distinct approach through its wholly-owned subsidiary structure. DBMF is currently the leading managed futures ETF based on performance and AUM. FUT's competitive advantages include the experience of its management team and the strategic approach of its subsidiary. However, it faces challenges from other funds with potentially lower expense ratios or different strategy implementations, and investor performance has fluctuated considerably.

Historical Performance: Historical performance varies significantly depending on market trends. Provide past performance data directly from fund factsheet.

Benchmark Comparison: Performance should be compared to a managed futures index or a composite benchmark that reflects its investment strategy.

Expense Ratio: 0.95

Average Trading Volume

Average trading volume is moderate, providing sufficient liquidity for most investors.

Bid-Ask Spread

The bid-ask spread is generally tight, indicating relatively low trading costs.

Market Environment Factors

Economic indicators, interest rate policies, inflation expectations, and global market volatility can significantly impact the performance of managed futures strategies.

Growth Trajectory

Growth is dependent on the prevailing trends across the futures markets and the performance of its managed futures strategy. There have been no major strategy changes.

Competitive Edge

FUT's wholly-owned subsidiary structure provides potentially greater control over the implementation of its managed futures strategy. First Trust's brand recognition and distribution network are also beneficial. FUT benefits from First Trust's robust platform, a long-established name and a focus on active strategies, providing expertise to navigate complex futures markets.

Volatility

FUT can exhibit high volatility due to the nature of futures contracts and the use of leverage.

Market Risk

The fund is subject to market risk based on the performance of the underlying futures contracts and the overall market environment. Managed futures can have periods of underperformance.

Ideal Investor Profile

FUT is suitable for investors seeking diversification and potential inflation hedging through alternative investments and who have a higher risk tolerance.

Market Risk

It is best suited for investors with a long-term investment horizon who understand managed futures strategies and can tolerate potential volatility.

First Trust Managed Futures Strategy Fund (FUT) offers a unique approach to managed futures through its wholly-owned subsidiary, seeking long-term capital appreciation. Its performance is heavily influenced by market trends and the effectiveness of its trading strategies. The fund carries potential high volatility but can serve as a diversifier for investors with a higher risk tolerance. Investors should carefully consider FUT's expense ratio and understand the complexities of managed futures before investing, and compare to benchmarks and similar ETFs to make the optimal choice.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar
• Company Filings

Disclaimers:

The information provided is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions. Performance data is historical and not indicative of future results.