First Trust Preferred Securities and Income ETF (FPE)FPE

ETF First Trust Preferred Securities and Income ETF Summary

Profile:

First Trust Preferred Securities and Income ETF (FPE) is a passively managed exchange-traded fund that seeks to provide current income and capital appreciation by investing in a diversified portfolio of US dollar-denominated preferred securities.

Objective:

FPE's primary objective is to generate high current income with a secondary objective of capital appreciation.

Issuer:

First Trust Advisors L.P. is the issuer of FPE. The firm is a leading provider of exchange-traded funds (ETFs) with over $175 billion in assets under management.

Reputation and Reliability:

First Trust Advisors L.P. has a strong reputation in the ETF industry, with a track record of successfully managing a diverse range of ETFs across various asset classes.

Management:

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

Market Share:

FPE is the largest preferred securities ETF by assets under management, accounting for over 20% of the market share.

Total Net Assets:

As of November 8th, 2023, FPE has $10.57 billion in total net assets.

Moat:

FPE's competitive advantages include:

• Size and Scale: Being the largest preferred securities ETF provides FPE with significant economies of scale and liquidity.
• Diversification: The ETF invests in a diversified portfolio of preferred securities across various industries and issuers, mitigating concentration risk.
• Passive Management: The passive management approach keeps expense ratios low, making the ETF more tax-efficient.

Financial Performance:

FPE has historically delivered strong total returns, outperforming its benchmark index over various timeframes.

Growth Trajectory:

The preferred securities market is expected to continue growing due to increasing demand from income-seeking investors.

Liquidity:

FPE has high average trading volume and tight bid-ask spreads, ensuring easy buying and selling of shares.

Market Dynamics:

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

Competitors:

Key competitors include:

• iShares Preferred and Income Securities ETF (PFF)
• Invesco Preferred ETF (PGX)
• SPDR Bloomberg Barclays Preferred Stock ETF (SPYP)

Expense Ratio:

FPE's expense ratio is 0.55%.

Investment Approach and Strategy:

FPE tracks the ICE Exchange-Listed Preferred & Hybrid Securities Index, investing in a diversified portfolio of preferred securities.

Key Points:

• High current income potential
• Diversification across industries and issuers
• Low expense ratio
• Strong track record
• High liquidity

Risks:

• Interest rate risk
• Credit risk
• Market risk

Who Should Consider Investing:

FPE is suitable for investors seeking high current income and capital appreciation potential with a lower risk profile compared to equities.

Fundamental Rating Based on AI:

7.5 out of 10. FPE receives a strong rating due to its size, diversification, passive management, historical performance, and growth prospects. However, it is essential to consider interest rate and credit risks before investing.

Resources:

• First Trust Preferred Securities and Income ETF Website: https://www.ftportfolios.com/products/etf/fpe
• Morningstar: https://www.morningstar.com/etfs/arcx/fpe/portfolio

Disclaimer:

This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.