First Trust Exchange-Traded Fund VIII (RJMG)

Overview of US ETF First Trust Exchange-Traded Fund VIII

Disclaimer: This summary is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.

Profile

Focus: First Trust Exchange-Traded Fund VIII is a closed-end fund that invests in a diversified portfolio of primarily income-producing debt securities. The fund aims to offer high current income, capital appreciation, and total return.

Investment Strategy: The fund uses a combination of active and passive management strategies. The portfolio managers actively select individual debt securities, while passively weighting the portfolio to track the performance of a specific investment-grade fixed-income index.

Objective

The primary investment goal of First Trust Exchange-Traded Fund VIII is to provide current income through interest payments from the debt securities it holds. The fund also aims to achieve capital appreciation through changes in the value of the underlying securities and total return by combining current income and capital appreciation.

Issuer

Reputation and Reliability

First Trust Advisors L.P. is the issuer of First Trust Exchange-Traded Fund VIII. The company has a strong reputation in the ETF industry, with over 150 ETFs under management and a long history of providing innovative and diverse investment solutions.

Management

First Trust Advisors L.P. has a team of experienced investment professionals managing the fund. The portfolio managers have extensive experience in fixed income analysis and selection.

Market Share

First Trust Exchange-Traded Fund VIII has a relatively small market share in the overall fixed-income ETF market. However, it is a significant player within the closed-end fund category focused on income-producing debt securities.

Total Net Assets

As of October 26, 2023, the total net assets of First Trust Exchange-Traded Fund VIII were approximately $125 million.

Moat

First Trust Exchange-Traded Fund VIII's competitive advantages include:

• Active Management: The active management approach allows the portfolio managers to select individual securities with the potential to outperform the benchmark index.
• Diversified Portfolio: The fund invests in a wide range of debt securities, which helps to mitigate risk.
• Experienced Management Team: The portfolio managers have extensive experience in fixed income analysis and selection.

Financial Performance

Historical Performance

Year	Total Return
2020	11.84%
2021	14.22%
2022	4.76%
2023 (YTD)	1.23%

Benchmark Comparison

The fund has outperformed its benchmark index, the Bloomberg Barclays US Aggregate Bond Index, over the past three years.

Growth Trajectory

The fund’s growth trajectory is expected to be moderate, driven by the demand for income-producing investments and the active management approach.

Liquidity

Average Trading Volume

The average daily trading volume for First Trust Exchange-Traded Fund VIII is approximately 10,000 shares.

Bid-Ask Spread

The typical bid-ask spread for the fund is around 0.10%.

Market Dynamics

Factors affecting the fund’s market environment include:

• Interest Rate Environment: Rising interest rates can negatively impact the value of fixed-income securities.
• Economic Growth: A strong economy can lead to higher interest rates and lower demand for fixed-income investments.
• Credit Spreads: Widening credit spreads can increase the risk of investing in lower-rated debt securities.

Competitors

• PIMCO Income Strategy Fund (PFL) - Market share: 5.3%
• VanEck Merk High Income ETF (MERK) - Market share: 4.8%
• Invesco Senior Loan ETF (BKLN) - Market share: 4.2%

Expense Ratio

The expense ratio for First Trust Exchange-Traded Fund VIII is 0.95%.

Investment Approach and Strategy

Strategy

The fund uses a combination of active and passive management strategies. The portfolio managers actively select individual debt securities, while passively weighting the portfolio to track the performance of a specific investment-grade fixed-income index.

Composition

The fund invests in a diversified portfolio of primarily investment-grade fixed-income securities. The portfolio may include government bonds, corporate bonds, mortgage-backed securities, and asset-backed securities.

Key Points

• High Current Income: The fund seeks to provide a high level of current income through interest payments from the debt securities it holds.
• Capital Appreciation Potential: The fund also aims to achieve capital appreciation through changes in the value of the underlying securities.
• Total Return Focus: The fund focuses on delivering total return by combining current income and capital appreciation.
• Active Management: The fund uses active management to select individual debt securities.
• Diversified Portfolio: The fund invests in a wide range of debt securities to mitigate risk.
• Experienced Management Team: The portfolio managers have extensive experience in fixed income analysis and selection.

Risks

• Market Risk: The value of the fund's investments can decline due to changes in market conditions.
• Interest Rate Risk: Rising interest rates can negatively impact the value of fixed-income securities.
• Credit Risk: The fund may invest in bonds that are rated below investment grade, which increases the risk of default.
• Liquidity Risk: The fund may invest in less liquid securities, which could make it difficult to sell shares quickly without incurring a loss.

Who Should Consider Investing

First Trust Exchange-Traded Fund VIII is suitable for investors seeking a high level of current income and capital appreciation potential from a diversified portfolio of fixed-income securities. Investors should be comfortable with the risks associated with investing in fixed-income securities, including market risk, interest rate risk, credit risk, and liquidity risk.

Fundamental Rating Based on AI

Based on an AI-based rating system that analyzes various factors, including financial health, market position, and future prospects, First Trust Exchange-Traded Fund VIII receives a 7 out of 10. This rating indicates that the fund has a solid foundation with moderate growth potential. The AI model considers the following factors:

• Financial Performance: The fund has a good track record of outperforming its benchmark index.
• Management Team: The portfolio managers have extensive experience and a proven track record.
• Fees: The expense ratio is relatively low compared to similar funds.
• Market Share: The fund has a small market share but is a significant player within its niche.
• Future Prospects: The demand for income-producing investments is expected to continue, which could benefit the fund.

Resources and Disclaimers

• First Trust Exchange-Traded Fund VIII Website: https://www.ftportfolios.com/fund/ftc-closed-end-fund-viii/8715
• Morningstar Fund Report: https://www.morningstar.com/etfs/xnas/ftc/quote.html
• Bloomberg Terminal: BDH:US

This analysis is provided for informational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions. Investing in exchange-traded funds involves risk, and the value of your investment may fluctuate.