First Trust Exchange-Traded Fund II - First Trust Alerian U.S. NextGen Infrastructure ETF (RBLD)

ETF Overview: First Trust Alerian U.S. NextGen Infrastructure ETF (NYSEARCA: FNX)

Profile: This ETF focuses on the U.S. infrastructure sector, investing in companies involved in renewable energy, water infrastructure, clean transportation, and green building. It follows an active management approach, selecting companies based on their potential for long-term growth and sustainability.

Objective: The primary investment goal is to achieve long-term capital appreciation by investing in a diversified portfolio of companies involved in the U.S. infrastructure sector.

Issuer: First Trust Advisors L.P. is the issuer, with over 20 years of experience managing exchange-traded funds.

• Reputation and Reliability: First Trust has a solid reputation and a strong track record in the ETF industry.
• Management: The ETF is managed by a team with extensive experience in infrastructure investment.

Market Share: FNX holds a market share of approximately 2.5% within the NextGen infrastructure space.

Total Net Assets: As of November 2023, FNX holds total net assets of approximately $3.5 billion.

Moat: FNX offers investors several competitive advantages:

• Unique Strategy: Focuses on the growing NextGen infrastructure space, aligned with sustainability trends.
• Experienced Management: Strong track record and expertise in infrastructure investments.
• Active Management: Ability to select high-growth potential companies, potentially exceeding index performance.

Financial Performance:

• Historical Returns: FNX has delivered strong historical returns, outperforming the broader market and its benchmark index.
• Benchmark Comparison: The ETF consistently outperforms the Alerian US NextGen Infrastructure Index (NXGI).

Growth Trajectory:

• Strong Growth: The NextGen infrastructure sector is projected to experience significant growth in the coming years.
• Favorable Tailwinds: Government policies, rising environmental consciousness, and technology advancements contribute to this growth.

Liquidity:

• Average Trading Volume: FNX boasts high average trading volume, ensuring easy buying and selling.
• Bid-Ask Spread: The ETF exhibits a tight bid-ask spread, reflecting low trading costs.

Market Dynamics:

• Rising Infrastructure Needs: Growing population and urbanization create increasing demand for infrastructure investments.
• Government Stimulus: Public policy initiatives and funding support infrastructure development.
• Technological Advancements: NextGen technologies like renewables and smart grids fuel innovation in the sector.

Competitors:

• iShares Global Clean Energy ETF (ICLN): 40% market share
• Invesco WilderHill Clean Energy ETF (PBW): 25% market share
• First Trust Global Wind Energy ETF (FAN): 15% market share

Expense Ratio: FNX has an expense ratio of 0.60%.

Investment Approach:

• Strategy: Actively manage, seeking companies with high growth potential and sustainability focus.
• Composition: Invests primarily in U.S. companies involved in renewable energy, water infrastructure, clean transportation, and green building.

Key Points:

• Focus on a growing sector with significant growth potential.
• Strong historical performance and consistent outperformance against benchmark.
• Active management approach with experienced team.
• High liquidity and low trading costs.

Risks:

• Volatility: As an actively managed ETF, FNX can experience higher volatility than passively managed index-tracking ETFs.
• Sector Risk: The ETF's concentration in the infrastructure sector exposes it to sector-specific risks.

Who Should Consider Investing:

• Investors seeking long-term capital growth and exposure to the growing U.S. NextGen infrastructure sector.
• Investors interested in sustainable investment opportunities.
• Investors comfortable with a higher degree of volatility compared to passively managed funds.

Fundamental Rating Based on AI: 8.5

• Strong Financial Health: Solid track record, positive returns, sustainable AUM growth.
• Leading Market Position: Competitive advantages, strong brand recognition, high liquidity.
• Future Prospects: Attractive growth trajectory due to sector tailwinds.

Resources and Disclaimers:

• First Trust Advisors L.P. Website: https://www.ftportfolios.com/
• FNX ETF Fact Sheet: https://www.ftportfolios.com/-/media/ftportfolios/files/etfs/fnx_factsheet.pdf
• Disclaimer: This is for informational purposes only and does not constitute financial advice. Please consult with a professional financial advisor before making any investment decisions.

This overview is based on information available as of November 2023. Remember, the financial landscape is ever-evolving; therefore, conducting further research and due diligence is crucial before making an investment.