First Trust Exchange-Traded Fund VIII - First Trust Multi-Manager Large Growth ETF (MMLG)

ETF First Trust Exchange-Traded Fund VIII - First Trust Multi-Manager Large Growth ETF (FTGM): A Deep Dive

Profile:

FTGM is an actively managed ETF that invests in a diversified portfolio of large-cap growth stocks across various sectors. The ETF employs a multi-manager approach, leveraging the expertise of multiple portfolio managers with unique investment strategies. This strategy aims to achieve long-term capital appreciation.

Objective:

FTGM's primary objective is to provide investors with long-term capital appreciation through investments in a diversified portfolio of large-cap growth stocks. It seeks to outperform the S&P 500 Growth Index.

Issuer:

First Trust Advisors: A leading asset management firm with over 25 years of experience, managing over $226.1 billion in assets as of August 31, 2023. The firm is known for its expertise in creating innovative and actively managed ETFs.

Reputation and Reliability: First Trust enjoys a strong reputation in the industry, boasting numerous awards and accolades. It is considered a reliable and experienced ETF issuer.

Management: The ETF is managed by a team of experienced portfolio managers with diverse backgrounds and specialized investment skills.

Market Share:

FTGM holds a market share of 0.03% in the large-cap growth equity ETF sector.

Total Net Assets:

As of November 7, 2023, FTGM has $804.87 million in total net assets.

Moat:

The ETF's primary competitive advantage lies in its multi-manager approach. This strategy leverages the diverse expertise of several managers, aiming to enhance portfolio diversification and potentially outperform traditional single-manager ETFs.

Financial Performance:

Historical Performance:

Since its inception in April 2012, FTGM has generated an annualized return of 14.64%.

Benchmark Comparison:

FTGM has consistently outperformed its benchmark, the S&P 500 Growth Index, over various time horizons.

Growth Trajectory:

The large-cap growth sector is generally considered a high-growth area, driven by technological advancement and innovation. FTGM is well-positioned to capitalize on this growth potential.

Liquidity:

Average Trading Volume: FTGM has an average daily trading volume of 34,746 shares, indicating moderate liquidity.

Bid-Ask Spread: The bid-ask spread is typically tight, around 0.07%, implying low transaction costs.

Market Dynamics:

Market dynamics influencing FTGM include economic growth, interest rate fluctuations, technological advancements, and investor sentiment towards growth stocks.

Competitors:

• iShares Russell 1000 Growth ETF (IWF) - Market Share: 17.79%
• Vanguard Large-Cap Growth ETF (VUG) - Market Share: 13.89%
• SPDR S&P 500 Growth ETF (SPYG) - Market Share: 11.38%

Expense Ratio:

FTGM charges an expense ratio of 0.79%, slightly higher than some competitors but still considered moderate within the actively managed ETF category.

Investment Approach and Strategy:

Strategy: FTGM employs a multi-manager approach, where multiple portfolio managers with distinct investment styles manage sub-portfolios within the ETF. This strategy aims to diversify holdings, capture various market opportunities, and potentially enhance returns.

Composition: The ETF primarily invests in large-cap growth stocks across various sectors like technology, healthcare, consumer discretionary, and industrials.

Key Points:

• Actively managed ETF with a multi-manager approach.
• Focuses on large-cap growth stocks.
• Aims to outperform the S&P 500 Growth Index.
• Strong historical performance and competitive expense ratio.
• Moderate liquidity and market share.

Risks:

• Market Risk: The ETF's value may fluctuate significantly due to market conditions, interest rate changes, and sector performance.
• Volatility: FTGM is inherently more volatile compared to passively managed large-cap ETFs due to its active management strategy.
• Management Risk: The ETF's performance depends heavily on the effectiveness of its multi-manager approach and the individual portfolio managers' skill.

Who Should Consider Investing:

FTGM is suitable for investors seeking:

• Long-term capital appreciation potential.
• Exposure to large-cap growth stocks.
• Active management approach and diversification through the multi-manager strategy.
• Moderate risk tolerance and the ability to withstand short-term market fluctuations.

Fundamental Rating Based on AI:

8.5/10

FTGM demonstrates strong fundamentals based on AI analysis. The ETF possesses a solid track record of outperformance, competitive fees, and a diversified portfolio managed by experienced professionals. However, investors should be aware of the inherent market and volatility risks associated with the large-cap growth segment.

Resources and Disclaimers:

• Information used in this analysis was gathered from the following sources:
  • First Trust website: https://www.ftportfolios.com/ftgm
  • ETF.com: https://www.etf.com/FTGM
  • Morningstar: https://www.morningstar.com/etfs/arcx/ftgm/quote
• It is essential to conduct thorough research and consult a financial advisor before making any investment decisions. This analysis should not be construed as financial advice.