First Trust Tactical High Yield ETF (HYLS)

Overview

The First Trust Tactical High Yield ETF (HYLS) seeks to provide current income. It employs a tactical asset allocation strategy, primarily investing in high-yield corporate bonds. The investment strategy dynamically adjusts its holdings based on market conditions and perceived opportunities.

Reputation and Reliability

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

Management Expertise

First Trust has a dedicated team of experienced portfolio managers and analysts specializing in fixed income and tactical asset allocation.

Goal

To provide current income.

Investment Approach and Strategy

Strategy: The ETF employs a tactical strategy, dynamically adjusting its exposure to different segments of the high-yield market based on market analysis.

Composition The ETF primarily holds high-yield corporate bonds, including securities rated below investment grade.

Market Share: HYLS's market share is dependent on the high-yield ETF market. It's a prominent player but not necessarily the largest.

Total Net Assets (AUM): 67100000

Key Competitors

• SPDR Portfolio High Yield Bond ETF (SPHY)
• iShares iBoxx High Yield Corporate Bond ETF (HYG)
• VanEck High Yield Muni ETF (HYD)

Competitive Landscape

The high-yield ETF market is competitive, with several large players. HYLS differentiates itself through its tactical approach, which may offer advantages in certain market environments. However, this also adds complexity and relies heavily on the manager's skill, so its competitors are broader, more passively managed high yield ETFs.

Historical Performance: Historical performance data would need to be retrieved from financial data providers. This would include return data for various periods (e.g., 1-year, 3-year, 5-year, 10-year).

Benchmark Comparison: Benchmark comparison requires identifying an appropriate high-yield benchmark index (e.g., Bloomberg US Corporate High Yield Bond Index) and comparing HYLS's performance against it.

Expense Ratio: 0.85

Average Trading Volume

The average trading volume of HYLS is moderate, providing sufficient liquidity for most investors, but can vary based on broader market conditions.

Bid-Ask Spread

The bid-ask spread for HYLS is typically reasonable, reflecting its liquidity and market depth and allowing trading with smaller differences between the two.

Market Environment Factors

Economic growth, interest rate movements, credit spreads, and investor sentiment all influence the performance of HYLS, as they affect the high-yield bond market.

Growth Trajectory

HYLS's growth trajectory depends on its ability to attract assets through strong performance and effective marketing, and on the overall demand for high-yield investments.

Competitive Edge

HYLSu2019s tactical asset allocation strategy attempts to provide higher risk-adjusted returns compared to passively managed high-yield ETFs. First Trust's experience in managing tactical ETFs is also a competitive advantage. The fund's ability to adapt to changing market conditions differentiates it from more static competitors. The perceived value and accuracy of their tactical allocations are critical.

Volatility

HYLS's volatility is moderate to high, reflecting the inherent risk associated with high-yield bonds, including the potential for default and market fluctuations.

Market Risk

HYLS is subject to credit risk (the risk of issuers defaulting), interest rate risk (the risk of rising rates decreasing bond values), and liquidity risk (the risk of difficulty selling bonds quickly).

Ideal Investor Profile

The ideal investor for HYLS is someone seeking current income and willing to accept moderate to high risk. They should understand the risks associated with high-yield bonds and the potential for capital losses.

Market Risk

HYLS may be suitable for long-term investors seeking income or active traders looking to capitalize on short-term market movements. It is less suitable for passive index followers.

First Trust Tactical High Yield ETF (HYLS) offers current income through a strategically managed high-yield bond portfolio. Its tactical approach aims to outperform passive high-yield ETFs, but this relies on the manager's skill. Investors should understand the ETF's inherent risks and expenses. It best suits investors seeking income and comfort with moderate-to-high volatility and the active management strategy, potentially long-term.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

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