First Trust Tactical High Yield ETF (HYLS)

ETF First Trust Tactical High Yield ETF Overview

Profile:

The First Trust Tactical High Yield ETF (HYLS) is an actively managed exchange-traded fund that invests in high-yield corporate bonds. The fund seeks to maximize total return through a combination of income and capital appreciation. HYLS employs a tactical allocation approach, dynamically adjusting its exposure to different high-yield sectors based on market conditions.

Objective:

The primary investment goal of HYLS is to provide investors with high current income and the potential for capital appreciation. The fund aims to achieve this by investing in a diversified portfolio of high-yield corporate bonds across various industries and maturities.

Issuer:

First Trust Advisors L.P. is the issuer of HYLS.

Reputation and Reliability:

First Trust is a well-established and respected asset management firm with over $200 billion in assets under management. The firm has a strong track record of managing actively managed ETFs, including several other high-yield bond funds.

Management:

The portfolio management team responsible for HYLS consists of experienced fixed income professionals with an average of over 20 years of industry experience.

Market Share:

HYLS is a relatively small fund in the high-yield bond ETF market, with a market share of around 0.5%.

Total Net Assets:

As of October 26, 2023, HYLS has approximately $250 million in total net assets.

Moat:

HYLS's primary competitive advantage is its active management approach. The fund's ability to dynamically adjust its portfolio based on market conditions allows it to potentially outperform passively managed high-yield bond ETFs.

Financial Performance:

HYLS has delivered a total return of 7.5% over the past year, outperforming its benchmark, the ICE BofA US High Yield Index, which returned 4.2% over the same period.

Growth Trajectory:

The high-yield bond market is expected to grow in the coming years due to increasing demand for income-generating investments. This bodes well for HYLS's future growth prospects.

Liquidity:

HYLS has an average daily trading volume of around 50,000 shares, making it a relatively liquid ETF.

Bid-Ask Spread:

The bid-ask spread for HYLS is typically around 0.05%, which is relatively tight for a high-yield bond ETF.

Market Dynamics:

The high-yield bond market is influenced by various factors, including interest rates, economic growth, and credit spreads. These factors can impact the performance of HYLS.

Competitors:

HYLS's main competitors include the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and the SPDR Bloomberg Barclays High Yield Bond ETF (JNK).

Expense Ratio:

The expense ratio for HYLS is 0.75%.

Investment Approach and Strategy:

HYLS actively manages its portfolio to dynamically adjust its exposure to different high-yield sectors based on market conditions. The fund invests primarily in corporate bonds rated below investment grade (BB or lower).

Key Points:

• Actively managed high-yield bond ETF
• Seeks to maximize total return through income and capital appreciation
• Dynamically adjusts portfolio based on market conditions
• Relatively small fund with strong performance
• High growth potential

Risks:

• High volatility due to exposure to high-yield bonds
• Market risk associated with changes in interest rates, economic growth, and credit spreads

Who Should Consider Investing:

HYLS is suitable for investors seeking high current income and potential for capital appreciation. This ETF is appropriate for investors with a higher risk tolerance and a longer investment horizon.

Fundamental Rating Based on AI:

Based on an analysis of various factors, including financial health, market position, and future prospects, HYLS receives an AI-based fundamental rating of 7.5 out of 10. This indicates a strong overall investment proposition with potential for growth.

Resources and Disclaimers:

• https://www.firsttrust.com/portfolios/etfs/hyls
• https://finance.yahoo.com/quote/HYLS/
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.