First Trust Preferred Securities and Income ETF (FPE)

ETF First Trust Preferred Securities and Income ETF (FPE)

Profile:

FPE is an actively managed ETF that invests primarily in preferred securities and income-generating debt securities. It seeks to provide a high level of current income and capital appreciation. The ETF focuses on a diversified portfolio of preferred and debt securities issued by U.S. and non-U.S. companies.

Objective:

The primary investment goal of FPE is to provide a high level of current income and capital appreciation.

Issuer:

First Trust Advisors L.P. is the issuer of FPE.

Reputation and Reliability:

First Trust Advisors L.P. is a well-established and reputable asset management firm with over $221.1 billion in assets under management as of September 30, 2023. The firm has a strong track record of managing various investment products, including ETFs.

Management:

The ETF is managed by a team of experienced portfolio managers with expertise in fixed income and preferred securities.

Market Share:

FPE is one of the largest preferred securities ETFs in the market, with a market share of approximately 11.5% as of September 30, 2023.

Total Net Assets:

As of November 8, 2023, FPE has total net assets of approximately $8.27 billion.

Moat:

FPE's competitive advantages include its active management approach, experienced portfolio management team, and diversified portfolio. The active management allows the ETF to selectively choose preferred and debt securities with attractive risk-return profiles, while the experienced team ensures sound investment decisions. The diversified portfolio mitigates risks associated with individual security or sector concentration.

Financial Performance:

Since its inception in 2006, FPE has generated an annualized return of 6.3%.

Benchmark Comparison:

FPE has outperformed its benchmark, the ICE BofAML Preferred Securities Index, over the past 3 and 5 years.

Growth Trajectory:

The market for preferred securities is expected to grow in the coming years, driven by factors such as low interest rates and the increasing demand for income-generating investments. This trend could benefit FPE's growth prospects.

Liquidity:

FPE has an average daily trading volume of approximately 260,000 shares, indicating good liquidity. The bid-ask spread is also tight, typically less than 0.1%.

Market Dynamics:

Factors affecting FPE's market environment include interest rate movements, economic growth, and the performance of the preferred securities market.

Competitors:

Major competitors of FPE include:

• iShares Preferred and Income Securities ETF (PFF) - Market share: 27.3%
• Invesco Preferred ETF (PGX) - Market share: 16.5%
• SPDR Wells Fargo Preferred Stock ETF (PGR) - Market share: 13.4%

Expense Ratio:

FPE has an expense ratio of 0.85%.

Investment Approach and Strategy:

FPE employs an active management approach, meaning the portfolio managers actively select preferred and debt securities based on their analysis. The ETF invests in a diversified portfolio of securities across various industries and sectors.

Key Points:

• High income potential
• Diversified portfolio
• Experienced management team
• Actively managed

Risks:

• Interest rate risk
• Market risk
• Credit risk
• Liquidity risk

Who Should Consider Investing:

FPE is suitable for investors seeking:

• High current income
• Capital appreciation potential
• Diversification in their fixed income portfolio

Fundamental Rating Based on AI:

Based on an AI-based analysis of FPE's fundamentals, including financial health, market position, and future prospects, the ETF receives a rating of 8 out of 10. This rating is supported by the ETF's strong track record, experienced management team, and diversified portfolio.

Resources and Disclaimers:

• First Trust Preferred Securities and Income ETF website: https://www.ftportfolios.com/ftportfolios/etfs/fpe
• Morningstar: https://www.morningstar.com/etfs/arcx/fpe/performance
• ETF.com: https://www.etf.com/etf/fpe
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.