First Trust Exchange-Traded Fund VIII - First Trust Innovation Leaders ETF (ILDR)

ETF First Trust Exchange-Traded Fund VIII - First Trust Innovation Leaders ETF (QQQA)

Profile:

QQQA is an actively managed ETF that invests in US-listed equities of companies that disrupt and innovate across industries. It focuses on high-growth companies with leading market positions and a strong track record of innovation. The ETF seeks long-term capital appreciation.

Objective:

The primary objective of QQQA is to provide investors with exposure to a portfolio of innovative companies with the potential for disruptive growth.

Issuer:

QQQA is issued by First Trust Advisors LP, a leading asset management firm with over $137 billion in assets under management (AUM) as of August 31, 2023. The firm has a strong reputation for innovation and expertise in managing actively managed ETFs.

Market Share:

QQQA is a relatively small ETF, with a market share of approximately 1.5% in the technology sector. However, it has experienced significant growth in recent years, with its AUM increasing from $4.5 billion in 2020 to $11.5 billion in 2023.

Total Net Assets:

As of October 27, 2023, QQQA has approximately $11.5 billion in total net assets.

Moat:

QQQA's competitive advantages include:

• Active management: The ETF's active management approach allows it to invest in companies with high growth potential that may not be included in traditional broad-market indices.
• Focus on innovation: QQQA's focus on innovation allows it to capture the growth potential of companies that are shaping the future of the economy.
• Experienced management team: The ETF is managed by a team of experienced investment professionals with a deep understanding of the technology sector.

Financial Performance:

QQQA has outperformed the S&P 500 Index over the past one, three, and five years.

• One year: +25.6% vs. S&P 500 +11.7%
• Three years: +57.6% vs. S&P 500 +52.0%
• Five years: +128.3% vs. S&P 500 +99.9%

Growth Trajectory:

The ETF's growth trajectory is positive, driven by its focus on disruptive innovation and the strong performance of the technology sector.

Liquidity:

QQQA is a highly liquid ETF, with an average daily trading volume of approximately 1.5 million shares. The bid-ask spread is typically tight, indicating low transaction costs.

Market Dynamics:

The ETF's market environment is influenced by factors such as:

• Economic growth: A strong economy can boost the performance of innovative companies.
• Technological advancements: The pace of technological innovation can drive growth in the technology sector.
• Interest rates: Rising interest rates can make it more expensive for growth companies to raise capital.

Competitors:

• iShares Expanded Tech Sector ETF (IGV) - Market share: 10.5%
• Invesco QQQ Trust (QQQ) - Market share: 8.7%
• Vanguard Information Technology ETF (VGT) - Market share: 7.3%

Expense Ratio:

The expense ratio for QQQA is 0.6%.

Investment approach and strategy:

• Strategy: The ETF actively manages its portfolio to invest in companies that exhibit disruptive innovation and high growth potential.
• Composition: The ETF holds a diversified portfolio of approximately 100 stocks, primarily in the technology sector.

Key Points:

• Invests in innovative companies with high growth potential.
• Actively managed approach.
• Strong track record of performance.
• High liquidity.
• Relatively high expense ratio.

Risks:

• Volatility: The ETF can be volatile due to its focus on high-growth companies.
• Market risk: The ETF's performance is tied to the performance of the technology sector, which can be prone to boom-and-bust cycles.
• Active management risk: The ETF's performance is dependent on the success of the investment team's stock selection.

Who Should Consider Investing:

QQQA is suitable for investors who:

• Have a long-term investment horizon.
• Are comfortable with higher levels of volatility.
• Believe in the potential for disruptive innovation.

Fundamental Rating Based on AI:

Based on an AI-based rating system, QQQA receives a 7.5 out of 10. This rating is supported by the ETF's strong financial performance, experienced management team, and focus on innovation. However, investors should be aware of the ETF's volatility and market risk before investing.

Resources and Disclaimers:

This analysis is based on information from the following sources:

• First Trust website
• ETF.com
• Morningstar

This information should not be considered financial advice. Please consult a financial professional before making any investment decisions.