First Trust Horizon Managed Volatility Developed International ETF (HDMV)

ETF First Trust Horizon Managed Volatility Developed International ETF Summary

Profile:

The First Trust Horizon Managed Volatility Developed International ETF (FTXD) seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the Indxx Global Developed ex-U.S. Multi-Factor Managed Volatility Index. This index utilizes a quantitative model to select constituents from a universe of developed international equities and apply a managed volatility strategy. FTXD focuses primarily on large- and mid-cap companies in developed markets outside the United States.

Objective:

The primary investment goal of FTXD is to provide long-term capital appreciation and income through a diversified portfolio of developed international equities while aiming to maintain a low level of volatility.

Issuer:

First Trust Advisors L.P. (FTA) is the issuer of FTXD. FTA is a privately held investment management firm with over $194.8 billion in assets under management as of January 31, 2023.

• Reputation and Reliability: FTA has a strong reputation and track record in the market. They are known for their innovative and customized ETF solutions.
• Management: The First Trust Horizon Managed Volatility Developed International ETF is managed by First Trust Advisors' experienced portfolio management team.

Market Share:

FTXD has a 0.3% market share in the Developed International Equity ETF category.

Total Net Assets:

As of November 1, 2023, FTXD has approximately $72.8 million in total net assets.

Moat:

• Unique Strategy: FTXD's managed volatility approach aims to reduce downside risk while maintaining exposure to the potential upside of developed international markets.
• Experienced Management: The ETF benefits from the expertise and experience of First Trust's portfolio management team.
• Diversification: The ETF's diversified portfolio across multiple sectors and countries helps mitigate single-company or country risk.

Financial Performance:

• Historical Performance: Since its inception in October 2017, FTXD has delivered a cumulative return of 12.23%.
• Benchmark Comparison: FTXD has outperformed its benchmark index, the MSCI EAFE Index, over the same period.

Growth Trajectory:

The ETF has seen steady growth in its assets under management, indicating increasing investor interest in its managed volatility approach.

Liquidity:

• Average Trading Volume: FTXD has an average daily trading volume of approximately 13,000 shares.
• Bid-Ask Spread: The bid-ask spread for FTXD is typically around 0.03%.

Market Dynamics:

• Economic Indicators: Global economic growth, interest rate fluctuations, and currency exchange rates can impact the performance of international equities.
• Sector Growth Prospects: The ETF's performance is influenced by the growth prospects of various sectors within developed international markets.
• Current Market Conditions: Market volatility and investor sentiment can affect the ETF's pricing and trading activity.

Competitors:

• iShares Core MSCI EAFE ETF (IEFA) - 4.7% market share
• Vanguard FTSE Developed Markets ETF (VEA) - 4.3% market share
• iShares International Select Dividend ETF (IDV) - 3.2% market share

Expense Ratio:

The expense ratio for FTXD is 0.65%.

Investment Approach and Strategy:

• Strategy: FTXD uses a quantitative model to select a diversified portfolio of developed international equities and applies a managed volatility strategy to maintain a low level of risk.
• Composition: The ETF primarily invests in large- and mid-cap stocks across various sectors and countries outside the United States.

Key Points:

• Managed volatility approach to mitigate downside risk.
• Diversified portfolio across multiple sectors and countries.
• Experienced management team.
• Outperformance of its benchmark index.
• Steady growth in assets under management.

Risks:

• Volatility: The ETF's managed volatility approach aims to reduce but does not eliminate volatility.
• Market Risk: The ETF is subject to risks associated with international equities, such as economic, political, and currency fluctuations.

Who Should Consider Investing:

FTXD is suitable for investors seeking:

• Long-term capital appreciation and income.
• Exposure to developed international equities.
• A strategy that aims to reduce downside risk.
• A diversified portfolio with experienced management.

Fundamental Rating Based on AI:

7.5/10

Justification:

FTXD demonstrates strong fundamentals, including a unique managed volatility strategy, experienced management, and a diversified portfolio. The ETF's historical performance and growth trajectory are positive. However, the relatively small market share and moderate liquidity are considerations.

Resources and Disclaimers:

• First Trust Horizon Managed Volatility Developed International ETF website: https://www.ftportfolios.com/ftxd
• Morningstar: https://www.morningstar.com/etfs/arcx/ftxd/quote
• 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.