First Trust Horizon Managed Volatility Developed International ETF (HDMV)

Overview

The First Trust Horizon Managed Volatility Developed International ETF (NYSEARCA: HDMV) seeks to provide total return, with an emphasis on current income, while managing volatility. It invests in developed international equity securities and utilizes a quantitative methodology to select and weight holdings based on volatility characteristics.

Reputation and Reliability

First Trust is a well-established ETF provider with a solid reputation for innovative and specialized investment strategies.

Management Expertise

First Trust Advisors L.P. has extensive experience in managing ETFs and utilizes a disciplined, quantitative approach to portfolio construction.

Goal

To provide total return, with an emphasis on current income, while managing volatility in developed international equities.

Investment Approach and Strategy

Strategy: The ETF uses a quantitative methodology to select and weight holdings based on volatility, aiming to reduce overall portfolio volatility relative to a broad developed international equity market.

Composition The ETF primarily holds stocks of companies located in developed international markets. The specific composition varies based on the volatility characteristics of the eligible securities.

Market Share: HDMV's market share is relatively small compared to larger, more established international equity ETFs.

Total Net Assets (AUM): 275968259.56

Key Competitors

• iShares MSCI EAFE Minimum Volatility Factor ETF (EFAV)
• Invesco S&P International Developed Momentum ETF (IDMO)
• Vanguard FTSE Developed Markets ETF (VEA)

Competitive Landscape

The international equity ETF market is highly competitive. HDMV differentiates itself with its managed volatility approach, targeting investors seeking downside protection. Compared to broad market ETFs like VEA, HDMV offers a lower volatility profile but may sacrifice some potential upside. EFAV is a direct competitor focusing on minimum volatility.

Historical Performance: Historical performance data is readily available from financial data providers and First Trust's website; however, it fluctuates.

Benchmark Comparison: The ETF's performance should be compared against a broad developed international equity index, such as the MSCI EAFE Index, and against other low-volatility strategies.

Expense Ratio: 0.8

Average Trading Volume

The ETF's average trading volume varies, but generally is not high, potentially increasing trading costs.

Bid-Ask Spread

The bid-ask spread can fluctuate depending on market conditions and trading volume, which can impact the cost of trading.

Market Environment Factors

Economic growth in developed international markets, interest rate policies, currency fluctuations, and geopolitical events can significantly impact HDMV's performance.

Growth Trajectory

The ETF's growth trajectory depends on investor demand for low-volatility international equity exposure and its ability to deliver competitive risk-adjusted returns.

Competitive Edge

HDMV's competitive edge lies in its managed volatility approach, appealing to risk-averse investors. The quantitative methodology aims to provide downside protection while still participating in market upside. First Trust's experience in managing ETFs adds credibility. The fund's focus on developed international markets offers diversification benefits.

Volatility

The ETF aims to exhibit lower volatility than broad developed international equity markets.

Market Risk

The ETF is subject to market risk associated with international equities, including currency risk, political risk, and economic instability in developed international markets.

Ideal Investor Profile

HDMV is suitable for risk-averse investors seeking exposure to developed international equities with lower volatility than broad market benchmarks.

Market Risk

HDMV is best suited for long-term investors seeking capital appreciation and income, with a focus on downside protection.

The First Trust Horizon Managed Volatility Developed International ETF offers exposure to developed international equities with a focus on managing volatility. Its quantitative methodology aims to provide downside protection for risk-averse investors. Investors should consider the ETF's expense ratio and trading volume when evaluating its suitability. While providing downside protection, potential upside might be sacrificed in a strong bull market. It is appropriate for long-term investors seeking a less volatile international equity allocation.

• EFAV
• IDMO
• VEA
• ACWX
• SCHF

Data Sources:

• First Trust Website
• ETF.com
• Morningstar
• Yahoo Finance

Disclaimers:

Data and analysis provided are for informational purposes only and should not be considered investment advice. Market conditions can change rapidly, and past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.