First Trust Multi-Manager Small Cap Opportunities ETF (MMSC)

Overview

The First Trust Multi-Manager Small Cap Opportunities ETF (FTSM) is an actively managed fund that seeks capital appreciation by investing in a diverse portfolio of small-cap U.S. companies, utilizing multiple sub-advisors with distinct investment styles.

Reputation and Reliability

First Trust is a well-established ETF provider with a solid reputation and a wide range of investment products.

Management Expertise

First Trust utilizes a multi-manager approach, leveraging the expertise of several sub-advisors specializing in small-cap investing.

Goal

The investment goal of FTSM is to seek capital appreciation.

Investment Approach and Strategy

Strategy: FTSM employs an active management strategy, allocating assets to multiple sub-advisors who employ distinct investment strategies to identify and invest in undervalued small-cap companies.

Composition The ETF's assets consist primarily of equity securities of small-capitalization U.S. companies.

Market Share: FTSM holds a modest market share within the broader small-cap ETF universe.

Total Net Assets (AUM): 108000000

Key Competitors

• iShares Russell 2000 ETF (IWM)
• Vanguard Small-Cap ETF (VB)
• Schwab U.S. Small-Cap ETF (SCHA)

Competitive Landscape

The small-cap ETF market is highly competitive, with several large, passively managed ETFs dominating market share. FTSM differentiates itself through its active, multi-manager approach, potentially offering outperformance but at a higher expense ratio. Competitors like IWM and VB offer broad, low-cost exposure to the Russell 2000 and a similar small-cap index, respectively, making them attractive to cost-conscious investors.

Historical Performance: Historical performance data should be obtained from financial data providers for accurate representation.

Benchmark Comparison: Benchmark comparison requires access to historical data and specific benchmark information.

Expense Ratio: 1.01

Average Trading Volume

Average trading volume is moderate and can vary depending on market conditions.

Bid-Ask Spread

The bid-ask spread is typically moderate, reflecting the ETF's liquidity and trading activity.

Market Environment Factors

Economic growth, interest rate movements, and investor sentiment towards small-cap stocks influence FTSM's performance. Sector-specific trends within the small-cap universe also play a crucial role.

Growth Trajectory

FTSM's growth trajectory depends on the ability of its sub-advisors to identify and capitalize on investment opportunities in the small-cap market. Changes in sub-advisor allocation or investment strategies can impact its future performance.

Competitive Edge

FTSM's competitive edge lies in its multi-manager approach, which diversifies investment styles and potentially reduces the risk of relying on a single manager's expertise. This structure aims to capture the best ideas from various skilled small-cap investors. The active management strategy allows for greater flexibility in navigating market volatility and identifying undervalued opportunities. However, the higher expense ratio compared to passive ETFs is a disadvantage.

Volatility

FTSM's volatility is expected to be similar to that of other small-cap equity funds, potentially higher than broader market indices.

Market Risk

FTSM is subject to market risk, particularly the risks associated with small-cap stocks, including lower liquidity, higher volatility, and greater sensitivity to economic fluctuations.

Ideal Investor Profile

The ideal investor for FTSM is one seeking capital appreciation through exposure to small-cap stocks and willing to accept the higher risk and expense ratio associated with active management.

Market Risk

FTSM is most suitable for long-term investors with a higher risk tolerance who believe in the potential for active management to generate superior returns in the small-cap space.

The First Trust Multi-Manager Small Cap Opportunities ETF (FTSM) is an actively managed fund offering exposure to a diverse portfolio of small-cap U.S. companies through a multi-manager approach. It aims to achieve capital appreciation but comes with a higher expense ratio compared to passively managed alternatives. Its success depends on the ability of its sub-advisors to outperform the broader small-cap market. FTSM is suited for investors with a long-term horizon and a higher risk tolerance who believe in active management.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Market conditions can change rapidly and may impact the performance of ETFs. Consult with a financial advisor before making any investment decisions.