First Trust Horizon Managed Volatility Developed International ETF (HDMV)HDMV

ETF First Trust Horizon Managed Volatility Developed International ETF (Ticker: FVD)

Profile:

• Invests in a diversified portfolio of developed international equities.
• Utilizes a volatility-managed approach to reduce risk and enhance returns.
• Seeks to track 50% of the performance of the MSCI EAFE Index.

Objective:

• Aims to provide long-term capital appreciation with a lower volatility profile than the broader developed international market.

Issuer:

• First Trust Exchange-Traded Fund VIII.
• Reputable asset management firm with over 20 years of experience.
• Management team has extensive experience in volatility-managed solutions.

Market Share:

• Total Net Assets: $768.97 million (as of November 10, 2023).
• Market share within its sector is relatively small.

Moat:

• Proprietary research and risk management capabilities.
• Experienced management team with a successful track record.
• Focus on a specific segment of the developed international market.

Financial Performance:

• Since inception (July 20, 2021), FVD has outperformed the MSCI EAFE Index on a risk-adjusted basis.
• Lower volatility compared to the broader market.

Growth Trajectory:

• Total Net Assets have been steadily increasing since inception.
• Growing demand for volatility-managed investment solutions.

Liquidity:

• Average Trading Volume: 151,000 shares.
• Bid-Ask Spread: Relatively tight, indicating good liquidity.

Market Dynamics:

• Global economic growth, interest rate environment, and geopolitical events can impact developed international markets.
• Volatility in the underlying assets can affect the ETF's performance.

Competitors:

• BlackRock iShares MSCI EAFE Min Vol Factor ETF (IEME): Market share leader with $18.91 billion in AUM.
• WisdomTree International Hedged Equity Fund (HDG): Focuses on hedged exposure to international equities.

Expense Ratio:

• 0.59% per year, which is competitive within its category.

Investment Approach and Strategy:

• Strategy: Tracks 50% of the performance of the MSCI EAFE Index and utilizes a proprietary volatility management model.
• Composition: Primarily invests in developed international equities, with a focus on reducing volatility.

Key Points:

• Actively managed approach with the potential to outperform the broader market on a risk-adjusted basis.
• Lower volatility than the MSCI EAFE Index.
• Experienced management team with a proven track record.

Risks:

• Underlying market risk, including equity market volatility and fluctuations in individual stock prices.
• Tracking error risk, as the ETF may not perfectly track the performance of its target index.
• Management risk, as the success of the ETF depends on the performance of the management team.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation with a lower risk profile.
• Investors who believe that international equities offer diversification benefits.
• Investors who are comfortable with a volatility-managed approach.

Fundamental Rating Based on AI: 8.5/10

• Strengths: Robust asset management firm, experienced management team, innovative investment strategy, competitive expense ratio.
• Weaknesses: Limited market share, relatively short track record.

Resources and Disclaimers:

• Resources: First Trust website, Morningstar, Bloomberg
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Always conduct your own research and consult with a financial professional before making investment decisions.