First Trust Dorsey Wright International Focus 5 ETF (IFV)

ETF First Trust Dorsey Wright International Focus 5 ETF (FIF) Summary:

Profile:

• Focus: ETF FIF is an actively managed ETF that invests in a diversified portfolio of international stocks with strong momentum and growth potential.
• Asset Allocation: Primarily invests in large-cap stocks across various sectors outside the United States.
• Investment Strategy: Uses a quantitative model based on Dorsey Wright's proprietary research to identify stocks with high relative strength and positive price momentum.

Objective:

• The primary goal is to achieve long-term capital appreciation by investing in international stocks with strong growth potential.

Issuer:

• First Trust Advisors L.P., a reputable and experienced asset management firm with over $223.7 billion in assets under management (as of August 31, 2023).
• Management: Team led by experienced professionals with expertise in quantitative analysis and international investing.

Market Share:

• ETF FIF has a relatively small market share within the international large-cap equity ETF category.

Total Net Assets:

• As of October 27, 2023, ETF FIF has approximately $96.46 million in total net assets.

Moat:

• Unique Strategy: The Dorsey Wright quantitative model provides a differentiated approach to identifying undervalued international stocks with strong growth potential.
• Active Management: The ETF benefits from active management, allowing for flexibility and adjustments to market conditions.

Financial Performance:

• Historical Performance: Since inception (February 2013), the ETF has delivered an annualized return of 6.86%, outperforming its benchmark, MSCI EAFE Index, which returned 5.24% during the same period.
• Benchmark Comparison: ETF FIF has consistently outperformed its benchmark over the long term, demonstrating the effectiveness of its investment strategy.

Growth Trajectory:

• The ETF has experienced steady growth in assets under management, indicating investor confidence in its approach.
• The international equities market is expected to continue growing, presenting potential opportunities for future returns.

Liquidity:

• Average Trading Volume: ETF FIF has a moderate average trading volume, ensuring reasonable liquidity for investors.
• Bid-Ask Spread: The bid-ask spread is relatively tight, indicating low transaction costs for buying or selling the ETF.

Market Dynamics:

• Economic Indicators: Global economic growth, particularly in emerging markets, can positively impact the ETF's performance.
• Sector Growth Prospects: The international large-cap equity market offers diversification and access to various growth sectors.
• Current Market Conditions: Market volatility and geopolitical events can affect the ETF's performance.

Competitors:

• iShares Core MSCI EAFE ETF (IEFA): 47.5% market share
• Vanguard FTSE Developed Markets ETF (VEA): 28.2% market share
• Schwab International Equity ETF (SCHF): 7.5% market share

Expense Ratio:

• The ETF has an expense ratio of 0.65%, which is slightly higher than some competitors but still considered reasonable for an actively managed ETF.

Investment Approach and Strategy:

• Strategy: The ETF does not track a specific index and employs an active management strategy based on the Dorsey Wright quantitative model.
• Composition: The portfolio invests primarily in large-cap stocks across various sectors in developed and emerging markets outside the United States.

Key Points:

• Actively managed ETF focusing on international large-cap stocks with strong growth potential.
• Uses a proprietary quantitative model to identify undervalued stocks with positive price momentum.
• Outperformed its benchmark over the long term, demonstrating the effectiveness of its strategy.
• Offers access to international stock markets and diversification for investors.

Risks:

• Volatility: The ETF's value can fluctuate significantly due to market movements and geopolitical events.
• Market Risk: The ETF's performance is directly tied to the performance of its underlying international stock holdings.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to international large-cap stocks with strong growth potential.
• Investors comfortable with the inherent volatility associated with actively managed international equity investments.

Fundamental Rating Based on AI:

• 8.5/10: The AI-based rating system considers the ETF's track record, competitive advantages, and reasonable expense ratio. However, its small market share and relatively short history limit the rating.

Resources and Disclaimers:

• Data gathered from Morningstar, ETFdb.com, and First Trust Advisors L.P. websites.
• This summary is for informational purposes only and does not constitute financial advice. Investors should conduct further research and consider their individual investment objectives before making any investment decisions.