First Trust Preferred Securities and Income ETF
Overview
Fund Objective & Strategy
The First Trust Preferred Securities and Income ETF is an actively managed exchange-traded fund. The fund's investment objective is to seek total return and to provide current income. Under normal market conditions, the fund invests at least 80% of its net assets (including investment borrowings) in preferred securities and income-producing debt securities including corporate bonds, high yield securities and convertible securities.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Facts
Current Fund Data
As Of 10/28/2024Fees And Expenses
As Of 3/1/2024The Investment Advisor has implemented fee breakpoints, which reduce the fund's investment management fee at certain assets levels. Please see the fund's Statement of Additional Information for full details.
Yield Information
As Of 9/30/2024Performance
Hypothetical Growth of $10,000 Since Inception *
Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost.
Month End Performance
As Of 9/30/2024Fund Performance * | 3 Month | YTD | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception†|
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Net Asset Value (NAV) | 5.63% | 11.74% | 19.78% | 1.44% | 3.71% | 5.23% | 4.75% |
Market Price | 5.81% | 12.07% | 20.08% | 1.45% | 3.71% | 5.22% | 4.76% |
  |   |   |   |   |   |   |   |
Index Performance ** | 3 Month | YTD | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception†|
ICE BofA US Investment Grade Institutional Capital Securities Index | 4.78% | 10.05% | 16.56% | 2.53% | 4.32% | 4.92% | 5.23% |
Blended Benchmark | 6.06% | 11.19% | 18.65% | 0.78% | 3.25% | 4.98% | N/A |
Bloomberg US Aggregate Bond Index | 5.20% | 4.45% | 11.57% | -1.39% | 0.33% | 1.84% | 1.80% |
†Inception Date is 2/11/2013
Quarter End Performance
As Of 9/30/2024Fund Performance * | 3 Month | YTD | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception†|
---|---|---|---|---|---|---|---|
Net Asset Value (NAV) | 5.63% | 11.74% | 19.78% | 1.44% | 3.71% | 5.23% | 4.75% |
Market Price | 5.81% | 12.07% | 20.08% | 1.45% | 3.71% | 5.22% | 4.76% |
  |   |   |   |   |   |   |   |
Index Performance ** | 3 Month | YTD | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception†|
ICE BofA US Investment Grade Institutional Capital Securities Index | 4.78% | 10.05% | 16.56% | 2.53% | 4.32% | 4.92% | 5.23% |
Blended Benchmark | 6.06% | 11.19% | 18.65% | 0.78% | 3.25% | 4.98% | N/A |
Bloomberg US Aggregate Bond Index | 5.20% | 4.45% | 11.57% | -1.39% | 0.33% | 1.84% | 1.80% |
†Inception Date is 2/11/2013
3 Year Statistics
As Of 9/30/2024Standard Deviation Standard Deviation is a measure of price variability (risk).
| Alpha Alpha is an indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.
| Beta Beta is a measure of price variability relative to the market.
| Sharpe Ratio Sharpe Ratio is a measure of excess reward per unit of volatility.
| Correlation Correlation is a measure of the similarity of performance.
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No Matching Results |
* Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost.
Returns do not represent the returns you would receive if you traded shares at other times. Market Price returns are determined by using the midpoint of the national best bid offer price ("NBBO") as of the time that the fund's NAV is calculated. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.
** Performance information for each listed index is for illustrative purposes only and does not represent actual fund performance. Indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Indexes are unmanaged and an investor cannot invest directly in an index.
ICE BofA US Investment Grade Institutional Capital Securities Index - The Index tracks the performance of US dollar denominated investment grade hybrid capital corporate and preferred securities publicly issued in the US domestic market.
Blended Benchmark - The Benchmark consists of a 30/30/30/10 blend of the ICE BofA Core Plus Fixed Rate Preferred Securities Index, the ICE BofA US Investment Grade Institutional Capital Securities Index, the ICE USD Contingent Capital Index and the ICE BofA US High Yield Institutional Capital Securities Index. The Blended Benchmark is intended to reflect the proportional market cap of each segment of the preferred and hybrid securities market. The Blended Benchmark returns are calculated by using the monthly returns of the four indices during each period shown above. At the beginning of each month the four indices are rebalanced to a 30/30/30/10 ratio to account for divergence from that ratio that occurred during the course of each month. The monthly returns are then compounded for each period shown above, giving the performance for the Blended Benchmark for each period shown above.
ICE BofA Core Plus Fixed Rate Preferred Securities Index - The Index tracks the performance of fixed rate US dollar denominated preferred securities issued in the US domestic market.
ICE USD Contingent Capital Index - The Index tracks the performance of investment grade and below investment grade contingent capital debt publicly issued in the major domestic and eurobond markets.
ICE BofA US High Yield Institutional Capital Securities Index - The Index tracks the performance of US dollar denominated sub-investment grade hybrid capital corporate and preferred securities publicly issued in the US domestic market.
Bloomberg US Aggregate Bond Index - The Index covers the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS, ABS, and CMBS.
Pricing
Price History
Bid/Ask Premium/Discount
As Of 10/28/2024  | 2023 | 1/1/2024 - 3/31/2024 | 4/1/2024 - 6/30/2024 | 7/1/2024 - 9/30/2024 |
---|---|---|---|---|
Days Traded at Premium | 63 | 27 | 18 | 53 |
Days Traded at Discount | 187 | 34 | 45 | 11 |
Holdings
Holdings
Security Name | Identifier | CUSIP | Shares / Quantity | Market Value | Weighting | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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No Matching Results |
Holdings are subject to change.
The holdings information set forth above for the date indicated reflects creation and redemption transactions from the prior business day and may differ from the holdings information currently available from the Fund's custodian and accounting agent. With respect to the market value of the Fund's holdings set forth above, the pricing sources are generally third party vendors. The Fund ultimately relies on pricing information provided by the Fund's accounting agent.
Fund Characteristics
As Of 9/30/2024Top Holdings
As Of 10/28/2024Excluding cash. Holdings are subject to change.
Top Country Exposure
As Of 10/28/2024Credit Quality
As Of 9/30/2024The credit quality and ratings information presented above reflect the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including S&P Global Ratings, Moody's Investors Service, Inc., Fitch Ratings, or a comparably rated NRSRO. For situations in which a security is rated by more than one NRSRO and the ratings are not equivalent, the highest rating is used. Sub-investment grade ratings are those rated BB+/Ba1 or lower. Investment grade ratings are those rated BBB-/Baa3 or higher. The credit ratings shown relate to the creditworthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change.
Security Type Breakdown
As Of 9/30/2024Top Industry Exposure
As Of 10/28/2024Distributions
Distribution History
Ex-Dividend Date | Record Date | Payable Date | Distribution Amount | Distribution Type Ordinary distributions may include realized short-term capital gains and/or returns of capital. Final determination of the source and tax status of all distributions paid in the current year are to be made after year-end. The Fund will send you a Form 1099-DIV for the current year that will tell you how to report these distributions for federal income tax purposes.
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No Matching Results |
The distribution history represents dividends that were paid by the Fund and is not a guarantee of the Fund's future dividend-paying ability.
You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or summary prospectus, or contact First Trust Portfolios L.P. at 1-800-621-1675 to request a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.
You could lose money by investing in a fund. An investment in a fund is not a deposit of a bank and is not insured or guaranteed. There can be no assurance that a fund's objective(s) will be achieved. Investors buying or selling shares on the secondary market may incur customary brokerage commissions. Please refer to each fund's prospectus and Statement of Additional Information for additional details on a fund's risks. The order of the below risk factors does not indicate the significance of any particular risk factor.
Unlike mutual funds, shares of the fund may only be redeemed directly from a fund by authorized participants in very large creation/redemption units. If a fund's authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a premium or discount to a fund's net asset value and possibly face delisting and the bid/ask spread may widen.
Banks are especially subject to the adverse effects of economic recession, currency exchange rates, government regulation, decreases in the availability of capital, volatile interest rates, portfolio concentrations in geographic markets and in commercial and residential real estate loans, as well as competition from new entrants. In addition, banks are subject to extensive regulation at both the federal and state level, which may affect permissible activities, profitability and the amount of capital that they must maintain.
During periods of falling interest rates if an issuer calls higher-yielding debt instruments, a fund may be forced to invest the proceeds at lower interest rates, likely resulting in a decline in the fund's income.
A fund that effects all or a portion of its creations and redemptions for cash rather than in-kind may be less tax-efficient.
Contingent convertible securities ("CoCos") may provide for mandatory conversion into common stock of the issuer under certain circumstances. Since the common stock of the issuer may not pay a dividend, investors in these instruments could experience a reduced income rate, potentially to zero; and conversion would deepen the subordination of the investor, hence worsening standing in a bankruptcy.
A convertible security is exposed to risks associated with both equity and debt securities. The value of convertibles may rise and fall with the market value of the underlying stock or vary with changes in interest rates and credit quality of the issuer.
An issuer or other obligated party of a debt security may be unable or unwilling to make dividend, interest and/or principal payments when due and the value of a security may decline as a result.
Ratings assigned by a credit rating agency are opinions of such entities, not absolute standards of credit quality and they do not evaluate risks of securities. Any shortcomings or inefficiencies in the process of determining credit ratings may adversely affect the credit ratings of the securities held by a fund and their perceived or actual credit risk.
The differences in yield between debt securities of different credit quality may increase which may reduce the market value of a fund's debt securities.
Changes in currency exchange rates and the relative value of non-US currencies may affect the value of a fund's investments and the value of a fund's shares.
Current market conditions risk is the risk that a particular investment, or shares of the fund in general, may fall in value due to current market conditions. As a means to fight inflation, the Federal Reserve and certain foreign central banks have raised interest rates; however, the Federal Reserve has recently lowered interest rates and may continue to do so. Recent and potential future bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle East and the United States. The hostilities and sanctions resulting from those hostilities have and could continue to have a significant impact on certain fund investments as well as fund performance and liquidity. The COVID-19 global pandemic, or any future public health crisis, and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets, negatively impacting global growth prospects.
A fund is susceptible to operational risks through breaches in cyber security. Such events could cause a fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.
Investments in debt securities subject the holder to the credit risk of the issuer and the value of debt securities will generally change inversely with changes in interest rates. In addition, debt securities generally do not trade on a securities exchange making them less liquid and more difficult to value.
Depositary receipts may be less liquid than the underlying shares in their primary trading market and distributions may be subject to a fee. Holders may have limited voting rights, and investment restrictions in certain countries may adversely impact their value.
Investments in emerging market securities are generally considered speculative and involve additional risks relating to political, economic and regulatory conditions.
Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.
Political or economic disruptions in European countries, even in countries in which a fund is not invested, may adversely affect security values and thus the fund's holdings. A significant number of countries in Europe are member states in the European Union, and the member states no longer control their own monetary policies. In these member states, the authority to direct monetary policies, including money supply and official interest rates for the Euro, is exercised by the European Central Bank. The implications of the United Kingdom's withdrawal from the European Union are difficult to gauge and cannot yet be fully known.
Extension risk is the risk that, when interest rates rise, certain obligations will be paid off by the issuer (or other obligated party) more slowly than anticipated, causing the value of these debt securities to fall. Rising interest rates tend to extend the duration of debt securities, making their market value more sensitive to changes in interest rates.
Financial services companies are subject to the adverse effects of economic recession, currency exchange rates, government regulation, decreases in the availability of capital, volatile interest rates, portfolio concentration in geographic markets, industries or products, and competition from new entrants in their fields of business.
Fixed-to-floating rate securities are securities that have a fixed dividend rate for an initial term that converts to a floating dividend rate upon the expiration of the initial term. While fixed-to- floating rate securities can be less sensitive to interest rate risk than fixed-rate securities they generally carry lower yields than similar fixed- rate securities.
Floating rate securities are structured so that the security's coupon rate fluctuates based upon the level of a reference rate. As a result, the coupon on floating rate securities will generally decline in a falling interest rate environment, causing a fund to experience a reduction in the income it receives from the security. A floating rate security's coupon rate resets periodically according to the terms of the security. Consequently, in a rising interest rate environment, floating rate securities with coupon rates that reset infrequently may lag behind the changes in market interest rates.
High yield securities, or "junk" bonds, are less liquid and are subject to greater market fluctuations and risk of loss than securities with higher ratings, and therefore, are considered to be highly speculative.
Hybrid capital securities are subject to the risks of equity securities and debt securities. The claims of holders of hybrid capital securities are generally subordinated to those of holders of traditional debt securities in bankruptcy, and thus hybrid capital securities may be more volatile and subject to greater risk than traditional debt securities.
A fund's income may decline when interest rates fall or if there are defaults in its portfolio.
A fund may be a constituent of one or more indices or models which could greatly affect a fund's trading activity, size and volatility.
As inflation increases, the present value of a fund's assets and distributions may decline.
Interest rate risk is the risk that the value of the debt securities in a fund's portfolio will decline because of rising interest rates. Interest rate risk is generally lower for shorter term debt securities and higher for longer-term debt securities.
If a fund invests in securities of another investment company, a fund may bear its ratable share of that investment company's expenses as well as a fund's advisory and administrative fees, which may result in duplicative expenses. A fund may also incur brokerage costs if purchasing or selling shares of exchange-traded investment companies.
Large capitalization companies may grow at a slower rate than the overall market.
To the extent a fund invests in floating or variable rate obligations that use the London Interbank Offered Rate ("LIBOR") as a reference interest rate, it is subject to LIBOR Risk. LIBOR has ceased to be made available as a reference rate and there is no assurance that any alternative reference rate, including the Secured Overnight Financing Rate ("SOFR"), will be similar to or produce the same value or economic equivalence as LIBOR. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain fund investments and may result in costs incurred in connection with closing out positions and entering into new trades. Any potential effects of the transition away from LIBOR on a fund or on certain instruments in which a fund invests is difficult to predict and could result in losses to the fund.
Certain fund investments may be subject to restrictions on resale, trade over-the-counter or in limited volume, or lack an active trading market. Illiquid securities may trade at a discount and may be subject to wide fluctuations in market value.
The portfolio managers of an actively managed portfolio will apply investment techniques and risk analyses that may not have the desired result.
Market risk is the risk that a particular security, or shares of a fund in general may fall in value. Securities are subject to market fluctuations caused by such factors as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious disease or other public health issues, recessions, natural disasters or other events could have significant negative impact on a fund.
A fund faces numerous market trading risks, including the potential lack of an active market for fund shares due to a limited number of market makers. Decisions by market makers or authorized participants to reduce their role or step away in times of market stress could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying values of a fund's portfolio securities and a fund's market price.
Securities of non-U.S. issuers are subject to additional risks, including currency fluctuations, political risks, withholding, lack of liquidity, lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers.
A fund and a fund's advisor may seek to reduce various operational risks through controls and procedures, but it is not possible to completely protect against such risks. The fund also relies on third parties for a range of services, including custody, and any delay or failure related to those services may affect the fund's ability to meet its objective.
Preferred securities combine some of the characteristics of both common stocks and bonds. Preferred stocks are typically subordinated to other debt instruments in terms of priority to corporate income, and therefore will be subject to greater credit risk than those debt instruments.
The market price of a fund's shares will generally fluctuate in accordance with changes in the fund's net asset value ("NAV") as well as the relative supply of and demand for shares on the exchange, and a fund's investment advisor cannot predict whether shares will trade below, at or above their NAV.
Prepayment risk is the risk that the issuer of a debt security will repay principal prior to the scheduled maturity date. Debt securities allowing prepayment may offer less potential for gains during a period of declining interest rates, as a fund may be required to reinvest the proceeds of any prepayment at lower interest rates.
Real Estate Investment Trusts ("REITs") are subject to the risks of investing in real estate, including, but not limited to, changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession. Increases in interest rates typically lower the present value of a REIT's future earnings stream and may make financing property purchases and improvements more costly. The value of a fund will generally decline when investors in REIT stocks anticipate or experience rising interest rates.
A fund may be unable to sell a restricted security on short notice or only sell them at a price below current value.
Senior Notes, or "baby bonds," are subject to the risk that the issuer or insurer of a baby bond may default on principal and/or interest payments when due which could affect the income generated by the Fund and/or the value of a baby bond. Baby bonds are also subject to typical risks associated with other fixed-income investments.
A fund with significant exposure to a single asset class, country, region, industry, or sector may be more affected by an adverse economic or political development than a broadly diversified fund.
Securities of small- and mid-capitalization companies may experience greater price volatility and be less liquid than larger, more established companies.
Subordinated debt has lower credit ratings and lower priority than other obligations of an issuer during bankruptcy, presenting a greater risk of nonpayment.
Trading on an exchange may be halted due to market conditions or other reasons. There can be no assurance that a fund's requirements to maintain the exchange listing will continue to be met or be unchanged.
Securities issued or guaranteed by federal agencies and U.S. government sponsored instrumentalities may or may not be backed by the full faith and credit of the U.S. government.
A fund may hold securities or other assets that may be valued on the basis of factors other than market quotations. This may occur because the asset or security does not trade on a centralized exchange, or in times of market turmoil or reduced liquidity. Portfolio holdings that are valued using techniques other than market quotations, including "fair valued" assets or securities, may be subject to greater fluctuation in their valuations from one day to the next than if market quotations were used. There is no assurance that a fund could sell or close out a portfolio position for the value established for it at any time.
A fund may invest in securities that exhibit more volatility than the market as a whole.
First Trust Advisors L.P. (FTA) is the adviser to the First Trust fund(s). FTA is an affiliate of First Trust Portfolios L.P., the distributor of the fund(s).
©2024 Morningstar, Inc. All Rights Reserved. The Morningstar RatingTM information contained herein: (1) is proprietary to Morningstar;(2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
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