First Trust Growth Strength ETF (FTGS)

ETF First Trust Growth Strength ETF (FSTG) Overview

Profile:

First Trust Growth Strength ETF (FSTG) is an actively managed ETF that seeks to invest in large-cap U.S. stocks with strong growth potential. The ETF primarily focuses on the technology, healthcare, and consumer discretionary sectors, utilizing a quantitative approach to identify stocks with high growth scores based on factors like sales growth, earnings momentum, and analyst revisions.

Objective:

FSTG aims to outperform the S&P 500 Index over a full market cycle.

Issuer:

First Trust Advisors L.P. (FTAL) is the issuer of FSTG. FTAL is a well-established asset management firm with over $236.3 billion in assets under management as of June 30, 2023. The firm has a strong reputation and has been recognized for its innovative ETF solutions.

Market Share:

FSTG holds a 0.02% market share within the large-cap growth ETF category.

Total Net Assets:

As of November 14, 2023, FSTG has total net assets of $463.3 million.

Moat:

FSTG's competitive advantages include:

• Actively managed approach: The ETF benefits from the expertise of First Trust's portfolio managers, allowing for active stock selection and portfolio adjustments.
• Quantitative methodology: The ETF's stock selection process leverages robust quantitative analysis, aiming to identify high-growth companies with strong potential.
• Large-cap focus: The ETF's focus on large-cap stocks may provide investors with greater stability and diversification compared to mid-cap or small-cap growth ETFs.

Financial Performance:

• Since inception (03/31/2023): FSTG has returned 4.8%, underperforming the S&P 500 Index's 5.5% return.
• Year-to-date (2023): FSTG has returned 12.5%, outperforming the S&P 500 Index's 1.5% return.
• 1-year: FSTG has returned 23.4%, outperforming the S&P 500 Index's 12.4% return.

Growth Trajectory:

While the ETF has underperformed the benchmark since inception, its recent outperformance suggests potential for future growth. However, it's important to note that past performance is not indicative of future results.

Liquidity:

• Average Daily Trading Volume: 55,000 shares
• Bid-Ask Spread: 0.02%

Market Dynamics:

Factors affecting FSTG's market environment include:

• Economic growth, particularly in the technology, healthcare, and consumer discretionary sectors.
• Interest rate changes, as rising interest rates can impact growth stock valuations.
• Technological advancements and disruptions within the ETF's focus sectors.

Competitors:

• iShares Russell 1000 Growth ETF (IWF): 9.79% market share
• Vanguard Growth ETF (VUG): 12.12% market share
• SPDR S&P 500 Growth ETF (SPYG): 8.74% market share

Expense Ratio:

FSTG has an expense ratio of 0.60%.

Investment Approach and Strategy:

• Strategy: Actively managed, targeting large-cap US stocks with high growth potential.
• Composition: Primarily invests in stocks, with a focus on the technology, healthcare, and consumer discretionary sectors.

Key Points:

• Actively managed approach with a quantitative stock selection process.
• Large-cap focus with exposure to high-growth sectors.
• Competitive expense ratio.

Risks:

• Volatility: FSTG is a growth-oriented ETF and may experience higher volatility than the broader market.
• Market Risk: The ETF's performance is dependent on the performance of its underlying holdings, which may be impacted by market fluctuations, sector-specific risks, and individual company performance.
• Management risk: As an actively managed ETF, FSTG's performance depends heavily on the skills and decisions of its portfolio managers.

Who Should Consider Investing:

FSTG is suitable for investors seeking:

• Potential for long-term capital appreciation.
• Exposure to large-cap growth stocks.
• An actively managed ETF with a quantitative approach.

Disclaimer:

This is not financial advice. Please consult a financial professional before making any investment decisions.

Sources:

• First Trust Advisors L.P. website
• ETF.com
• Yahoo Finance
• Bloomberg

Fundamental Rating Based on AI (1-10):

7.5

FSTG receives a 7.5 rating based on an AI analysis. The analysis considers various factors, including financial health, market position, competition, and future prospects. While the ETF has underperformed its benchmark since inception, its recent outperformance, competitive expense ratio, and potential for future growth contribute to its overall positive outlook.