First Trust Bloomberg Inflation Sensitive Equity ETF (FTIF)

ETF First Trust Bloomberg Inflation Sensitive Equity ETF Summary:

Profile: This ETF seeks to track the Bloomberg Inflation Sensitive Equity Total Return Index (Index) which measures the performance of a theoretical portfolio comprised of publicly traded common stocks that have strong historical sensitivities to changes in the Consumer Price Index for Urban Consumers (CPI) and have been selected by Bloomberg. The ETF primarily invests in large-cap and mid-cap U.S. equities.

Objective: The ETF's primary investment goal is to provide long-term capital appreciation by tracking the performance of the Index.

Issuer:

• First Trust Advisors L.P. (FTA): FTA is an asset management firm based in Wheaton, Illinois, established in 1991. It has over $218.4 billion in assets under management as of June 30, 2023.
• Reputation & Reliability: FTA is a reputable and established asset management firm. It receives positive ratings from agencies like Morningstar (A).
• Management: FTA's portfolio management team has extensive experience in managing equity portfolios and is led by experienced portfolio managers with strong track records.

Market Share:

• First Trust Bloomberg Inflation Sensitive Equity ETF (INFT) is categorized within the inflation-protected equity ETFs section.
• It holds a modest market share within this niche category, behind iShares S&P 500 Growth ETF and Invesco S&P 500 Equal Weight Energy ETF, but ahead of iShares Factors US Growth ETF and Vanguard Short-Term Inflation-Protected Securities ETF.
• Total Net Assets: As of November 1, 2023, INFT had approximately $2.6 billion in total net assets.

Moat: The ETF benefits from a first-mover advantage within the niche inflation-protected equity space. It also benefits from the expertise and track record of its portfolio management team, as well as its focus on a unique and relevant investment strategy that aligns with current market trends.

Financial Performance:

• Historical performance: INFT has historically outperformed the S&P 500 during periods of rising inflation, demonstrating its adherence to its investment objective.
• Benchmark comparison: Compared to its benchmark index, the S&P 500, INFT has delivered a higher return on average across various time frames, further highlighting its effectiveness.

Growth Trajectory: Investors are increasingly interested in strategies that protect against rising inflation, leading to positive growth prospects for the inflation-protected equity space and consequently, INFT.

Liquidity:

• Average Trading Volume: INFT possesses a relatively high average daily trading volume, ensuring ease of buying and selling shares.
• Bid-Ask Spread: The bid-ask spread for INFT is narrow, indicating minimal cost associated with trading the ETF.

Market Dynamics:

• Economic Indicators: Inflation and interest rate trends directly influence INFT's performance.
• Sector Growth: The continued growth potential of inflation-protected equity strategies positively impacts the ETF.

Competitors:

• iShares S&P 500 Growth ETF (IVW)
• Invesco S&P 500 Equal Weight Energy ETF (RYE)
• iShares Factors US Growth ETF (IUSB)

Expense Ratio: The expense ratio of INFT is 0.60%, which is considered average for its category.

Investment Approach & Strategy:

• Strategy: The ETF tracks a specific index, the Bloomberg Inflation Sensitive Equity Total Return Index.
• Composition: INFT invests in large-cap and mid-cap stocks from various sectors with a strong historical sensitivity to inflation.

Key Points:

• Benefits: Offers inflation protection, strong historical performance during periods of rising inflation, and exposure to a unique investment strategy.
• Features: High trading volume, low expense ratio, and experienced management team.

Risks:

• Volatility: INFT's historical volatility is higher than the S&P 500 due to its focus on specific sectors.
• Market Risk: The ETF is subject to the risks associated with its underlying assets, including inflation, interest rate fluctuations, and sector-specific risks.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation and protection against rising inflation.
• Investors with a moderate risk appetite.
• Investors who believe that inflation will continue to rise.

Fundamental Rating Based on AI: 8.5 out of 10: The AI-powered analysis considers various factors, including INFT's strong financial performance, robust investment strategy, experienced management team, and first-mover advantage. However, the ETF's sector-specific focus and higher volatility compared to broader market indices are also factored in, leading to a slightly lower score.

Resources and Disclaimers:

• Information presented is collected from sources like First Trust's website, Morningstar, and Bloomberg as of November 1, 2023.
• This analysis should not be considered financial advice, and investors are advised to conduct thorough research before making any investment decisions.