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Upturn AI SWOT - About
First Trust Municipal High Income ETF (FMHI)
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Upturn Advisory Summary
03/11/2025: FMHI (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
AI Based Fundamental Rating
Moderate Performance
These Stocks/ETFs, based on Upturn Advisory, typically align with the market average, offering steady but unremarkable returns.
Analysis of Past Performance
Type ETF | Historic Profit 6.28% | Avg. Invested days 49 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating | Upturn Advisory Performance  3.0 | ETF Returns Performance  2.0 |
| Profits based on simulation | Last Close 03/11/2025 |
Key Highlights
Volume (30-day avg) 80236 | Beta 1.05 | 52 Weeks Range 45.60 - 48.88 | Updated Date 04/1/2025 |
52 Weeks Range 45.60 - 48.88 | Updated Date 04/1/2025 |
Upturn AI SWOT
First Trust Municipal High Income ETF
ETF Overview
Overview
The First Trust Municipal High Income ETF (FMHI) seeks high current income exempt from federal income tax by investing primarily in high-yield municipal securities. It targets a portfolio of municipal bonds rated below investment grade, offering potentially higher yields than investment-grade bonds. The ETF emphasizes diversification across various municipal issuers and sectors.
Reputation and Reliability
First Trust is a well-established ETF provider with a strong reputation and a long track record of managing various ETF strategies.
Management Expertise
First Trust has a dedicated team of investment professionals with extensive experience in managing fixed-income portfolios, including municipal bonds.
Investment Objective
Goal
To seek high current income exempt from federal income tax.
Investment Approach and Strategy
Strategy: The ETF invests in a portfolio of municipal bonds, primarily those rated below investment grade. This strategy aims to generate higher yields than investment-grade municipal bonds.
Composition The ETF holds a portfolio of municipal bonds across various sectors, with a significant portion in lower-rated or unrated securities.
Market Position
Market Share: Limited data available to provide exact market share, but FMHI is a niche player focusing on high-yield municipal bonds.
Total Net Assets (AUM): 54120000
Competitors
Key Competitors
- HYMB
- VTEB
- SUB
- ITM
Competitive Landscape
The municipal bond ETF market includes both broad market and targeted strategies. FMHI focuses on high-yield municipal bonds, providing a potentially higher income stream but also higher risk compared to broad market funds. The competitive landscape is dominated by larger, more diversified funds, highlighting FMHI's niche focus. HYMB is a direct competitor to FMHI and the others are broad market players.
Financial Performance
Historical Performance: Historical performance data can be found on financial websites; specific return figures vary yearly.
Benchmark Comparison: The ETF is compared to high-yield municipal bond indices to gauge its effectiveness in generating income.
Expense Ratio: 0.45
Liquidity
Average Trading Volume
The average trading volume of FMHI is relatively low, which may impact execution costs.
Bid-Ask Spread
The bid-ask spread is typically wider compared to more liquid ETFs due to its focus on high-yield bonds.
Market Dynamics
Market Environment Factors
Interest rate movements, credit spreads, and the overall health of the municipal bond market affect FMHI's performance.
Growth Trajectory
Growth depends on investor appetite for high-yield municipal bonds and the fund's ability to maintain attractive yields and manage credit risk effectively.
Moat and Competitive Advantages
Competitive Edge
FMHI's competitive advantage lies in its focus on high-yield municipal bonds, offering potentially higher income compared to investment-grade municipal bond ETFs. The actively managed approach aims to select attractive bonds within the high-yield space. The issuer, First Trust, has a solid reputation for managing fixed-income ETFs. However, this strategy involves higher credit risk and potential volatility compared to more conservative municipal bond investments. It should be noted that at a Total Net Asset of 54.12e6, it might be hard for the ETF to compete with bigger players.
Risk Analysis
Volatility
The ETF exhibits higher volatility compared to investment-grade municipal bond ETFs due to its focus on lower-rated securities.
Market Risk
Market risk includes interest rate risk, credit risk (default risk of the municipal issuers), and liquidity risk associated with high-yield bonds.
Investor Profile
Ideal Investor Profile
Investors seeking high current income exempt from federal income tax and who are willing to accept higher credit risk and potential volatility in exchange for higher yields.
Market Risk
The ETF is suitable for long-term investors seeking tax-advantaged income and who understand the risks associated with high-yield bonds.
Summary
First Trust Municipal High Income ETF aims to provide high current income that is exempt from federal income tax by investing in below investment grade municipal bonds. The ETF carries higher risks due to investing in lower rated municipal bonds, which may lead to higher yield and higher volatility. Due to the inherent nature of high-yield municipal bonds, investors need to have a higher risk tolerance and a long term time frame. The Total Net Assets is small at 54.12e6, so the fund may be hard to manage compared to its competitor. In conclusion, the fund is more suitable to investors who are interested in high yield but are willing to take on risk.
Similar Companies
HYMB
SPDR® Nuveen Bloomberg High Yield Municipal Bond ETF
HYMB
SPDR® Nuveen Bloomberg High Yield Municipal Bond ETF
SUB
iShares Short-Term National Muni Bond ETF
SUB
iShares Short-Term National Muni Bond ETF
Sources and Disclaimers
Data Sources:
- First Trust website
- ETF.com
- Morningstar
- Bloomberg
Disclaimers:
The information provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions. Market share estimates based on available data and may not be exact.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About First Trust Municipal High Income ETF
Exchange NASDAQ | Headquaters - | ||
IPO Launch date - | CEO - | ||
Sector - | Industry - | Full time employees - | Website |
Full time employees - | Website | ||
Under normal market conditions, the fund seeks to achieve its investment objectives by investing at least 80% of its net assets (including investment borrowings) in municipal debt securities that pay interest that is exempt from regular federal income taxes. Municipal securities are generally issued by or on behalf of states, territories or possessions of the U.S. and the District of Columbia and their political subdivisions, agencies, authorities and other instrumentalities.
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