First Trust, begun trading two new Closed End Funds ETFs, the First Trust CEF Income Opportunity ETF (Nasdaq: FCEF) and the First Trust Municipal CEF Income Opportunity ETF (Nasdaq: MCEF) on Thursday, September 29, 2016. Here is a synopsis of the new ETFs:
1.
FUND INFORMATION:
| Symbol: FCEF | Exchange: NASDAQ |
| Name: First Trust CEF Income Opportunity ETF | Net Expense Ratio: 2.50% |
FUND OBJECTIVE:
The First Trust CEF Income Opportunity ETF is an actively managed exchange-traded fund which seeks to provide current income with a secondary emphasis on total return. Under normal market conditions, the Fund will seek to achieve its investment objectives by investing at least 80% of its net assets (including investment borrowings) in a portfolio of closed-end investment companies that are listed and traded in the United States on registered exchanges (Closed-End Funds).
Closed-End Funds issue shares of common stock that are traded on a securities exchange. Because the shares of Closed-End Funds cannot be redeemed upon demand to the issuer like the shares of an open-end investment company (such as the Fund), investors seek to buy and sell shares of Closed-End Funds in the secondary market.
In selecting the Closed-End Funds in which the Fund will invest (Underlying Funds),the Fund’s investment advisor will utilize a range of investment approaches. The Fund’s investment advisor generally takes a systemic approach to investing, including the utilization of a proprietary model that identifies, sorts and scores Closed-End Funds based upon various market metrics and economic factors, including, but not limited to, Fund size, duration, leverage ratio, average maturity, earnings rate, undistributed net investment income, distribution rate, premium or discount, net asset value and share price returns, sponsor and distribution policies.
The Underlying Funds may invest in, among other types of investments, U.S. and non-U.S. equity securities, U.S. and non-U.S. government debt, corporate debt, municipal securities, commodities, preferred securities, convertible securities, high yield securities (junk bonds), master limited partnerships and senior loans.
Fund Top Holdings (10/06/16):
| John Hancock Tax-Advantaged Dividend Income Fund | 4.02% |
| Prudential Global Short Duration High Yield Fund, Inc. | 4.01% |
| Cohen & Steers REIT and Preferred Income Fund, Inc. | 3.99% |
| Eaton Vance Tax-Advantaged Dividend Income Fund | 3.51% |
| PIMCO Dynamic Credit & Mortgage Income Fund | 3.50% |
| BlackRock Science & Technology Trust | 3.49% |
| Eaton Vance Tax-Advantaged Global Dividend Income Fund | 3.02% |
| The Gabelli Dividend & Income Trust | 3.02% |
| Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund | 3.01% |
| Ares Dynamic Credit Allocation Fund, Inc. | 3.00% |
Useful Links:
FCEF Home Page
Category:
2.
FUND INFORMATION:
| Symbol: MCEF | Exchange: NASDAQ |
| Name: First Trust Municipal CEF Income Opportunity ETF | Net Expense Ratio: 1.91% |
FUND OBJECTIVE:
The First Trust CEF Income Opportunity ETF is an actively managed exchange-traded fund which seeks to provide current income. Under normal market conditions, the Fund will seek to achieve its investment objectives by investing at least 80% of its net assets (including investment borrowings) in a portfolio of closed-end investment companies that are listed and traded in the United States on registered exchanges (Closed-End Funds) which invest primarily in municipal debt securities some or all of which pay interest that is exempt from regular federal income taxes (Municipal Securities).
Closed-End Funds issue shares of common stock that are traded on a securities exchange. Because the shares of Closed-End Funds cannot be redeemed upon demand to the issuer like the shares of an open-end investment company (such as the Fund), investors seek to buy and sell shares of Closed-End Funds in the secondary market. Municipal Securities are generally issued by or on behalf of states, territories or possessions of the U.S. and the District of Columbia and their political subdivisions, agencies, authorities and other instrumentalities.
The Closed-End Funds in which the Fund invests (Underlying Funds) may invest in a range of Municipal Securities, including, but not limited to, municipal lease obligations (and certificates of participation in such obligations), municipal general obligation bonds, municipal revenue bonds, municipal notes, municipal cash equivalents, private activity bonds (including without limitation industrial development bonds),and pre-refunded and escrowed to maturity bonds. In addition, Municipal Securities include inverse floating rate securities issued by tender option bond (TOB) trusts and securities issued by custodial receipt trusts, each of which are investment vehicles the underlying assets of which are municipal bonds. The Underlying Funds may invest in Municipal Securities of any maturity and any duration.The Underlying Funds may also invest in Municipal Securities of any credit quality, including high yield securities, also known as “junk bonds.”
In selecting the Underlying Funds, the Fund’s investment advisor will utilize a range of investment approaches. The Fund’s investment advisor generally takes a systemic approach to investing, including the utilization of a proprietary model that identifies, sorts and scores Closed-End Funds based upon various market metrics and economic factors, including, but not limited to, Fund size, duration, leverage ratio, average maturity, earnings rate, undistributed net investment income, distribution rate, premium or discount, net asset value and share price returns, sponsor and distribution policies. In addition, the Fund may also invest in ETFs.
Fund Top Holdings (10/06/16):
| BlackRock Municipal 2030 Target Term Trust | 5.01% |
| Nuveen Enhanced Municipal Credit Opportunities Fund | 4.94% |
| Western Asset Municipal Partners Fund Inc. | 4.94% |
| Nuveen AMT-Free Quality Municipal Income Fund | 4.92% |
| Nuveen Enhanced AMT-Free Municipal Credit Opportunities Fund | 4.92% |
| PIMCO Short Term Municipal Bond Active ETF | 4.07% |
| PIMCO Intermediate Municipal Bond Active ETF | 4.06% |
| Nuveen Intermediate Duration Municipal Term Fund | 4.05% |
| VanEck Vectors High Yield Municipal Index ETF | 4.04% |
| BlackRock MuniYield Quality Fund III, Inc. | 3.99% |
Useful Links:
MCEF Home Page
Category: