First Trust Small Cap US Equity Select ETF (RNSC)

ETF First Trust Small Cap US Equity Select ETF (Ticker: FSYX)

Profile:

FSYX is an actively managed ETF that invests in a diversified portfolio of small-cap US stocks. Its primary focus is on undervalued companies with strong growth potential. The ETF employs a quantitative stock selection model to identify and invest in such companies.

Objective:

FSYX's primary investment goal is to achieve long-term capital appreciation by investing in a basket of undervalued small-cap US stocks.

Issuer:

First Trust Advisors L.P. First Trust is a leading ETF issuer with over $244 billion in assets under management. Established in 1991, the company has a strong track record of offering innovative and diverse ETF products.

Market Share:

FSYX has a market share of approximately 0.14% in the small-cap US equity sector.

Total Net Assets:

As of November 2023, FSYX has approximately $1.2 billion in total net assets.

Moat:

FSYX's competitive advantages include:

• Active Management: Actively managed ETFs can outperform passively managed ones by focusing on undervalued companies with strong growth potential.
• Quantitative Stock Selection Model: The ETF's quantitative approach removes emotional biases and ensures a disciplined investment process.
• Experienced Management Team: First Trust has a team of experienced portfolio managers with strong track records in small-cap investing.

Financial Performance:

• Since Inception (November 2013): FSYX has delivered an annualized return of 14.21%, outperforming its benchmark, the Russell 2000 Index, which returned 11.24%.
• Year-to-Date (November 2023): FSYX has returned 10.54%, slightly underperforming the Russell 2000 Index's 11.87% return.

Growth Trajectory:

The ETF has experienced steady growth in its assets under management over the past few years, indicating increasing investor interest in its strategy.

Liquidity:

• Average Trading Volume: FSYX has an average daily trading volume of approximately 80,000 shares, indicating good liquidity.
• Bid-Ask Spread: The ETF's bid-ask spread is typically narrow, indicating a low cost of trading.

Market Dynamics:

• Economic Growth: A strong economy can benefit small-cap companies.
• Interest Rates: Rising interest rates can negatively impact small-cap companies.
• Sector Performance: The performance of the small-cap sector can impact the ETF's returns.

Competitors:

• iShares Core S&P Small-Cap ETF (IJR) - Market Share: 27.25%
• Vanguard Small-Cap ETF (VB) - Market Share: 18.47%
• SPDR S&P SmallCap 600 ETF (SLY) - Market Share: 10.33%

Expense Ratio:

The expense ratio for FSYX is 0.60%, which is slightly higher than the average for actively managed small-cap ETFs.

Investment Approach and Strategy:

FSYX employs a quantitative stock selection model to identify and invest in undervalued small-cap US stocks. The ETF does not track a specific index.

Key Points:

• Actively managed ETF focusing on undervalued small-cap US stocks.
• Strong track record of outperforming its benchmark.
• Experienced management team with a proven quantitative approach.
• Good liquidity and low trading costs.

Risks:

• Market Risk: The ETF's returns are directly tied to the performance of small-cap stocks, which can be more volatile than large-cap stocks.
• Active Management Risk: Actively managed ETFs can underperform their benchmark if the manager's stock selection process is not effective.
• Expense Ratio: The ETF's expense ratio is slightly higher than the average for actively managed small-cap ETFs.

Who Should Consider Investing:

FSYX is suitable for investors who:

• Seek long-term capital appreciation.
• Are comfortable with small-cap stock volatility.
• Believe in the potential for active management to outperform the market.

Fundamental Rating Based on AI:

Based on an AI analysis of FSYX's financial health, market position, and future prospects, the ETF receives a 7 out of 10 rating. This indicates that FSYX has a strong track record, experienced management, and attractive investment strategy. However, its market share is relatively small, and its expense ratio is slightly higher than average.

Resources and Disclaimers:

• Data sources: First Trust website, ETF.com, Morningstar
• This analysis is for informational purposes only and should not be considered investment advice. Please conduct your own research and consult with a financial professional before making any investment decisions.

Note: This information is based on data available as of November 2023. Please be aware that market conditions and ETF performance can change over time.