First Trust, begun trading 3 new ETFs, the First Trust RiverFront Dynamic Developed International ETF (Nasdaq: RFDI), the First Trust RiverFront Dynamic Asia Pacific ETF (Nasdaq: RFAP) and the First Trust RiverFront Dynamic Europe ETF (Nasdaq: RFEU) on Thursday, April 14, 2016. Here is a synopsis of the new ETFs:
1.
FUND INFORMATION:
| Symbol: RFDI | Exchange: NASDAQ |
| Name: First Trust RiverFront Dynamic Developed International ETF | Net Expense Ratio: 0.83% |
FUND OBJECTIVE:
The First Trust RiverFront Dynamic Developed International ETF is an actively managed exchange-traded fund.
Under normal market conditions, the Fund will seek to achieve its investment objective by investing at least 80% of its net assets (including investment borrowings) in a portfolio of equity securities of developed market companies, including through investments in common stock, depositary receipts, and common and preferred shares of real estate investment trusts (REITs), and forward foreign currency exchange contracts and currency spot transactions used to hedge the Fund’s exposure to the currencies in which the equity securities of such developed market companies are denominated.
Developed market companies are those companies
(i) whose securities are traded principally on a stock exchange in a developed market country,
(ii) that have a primary business office in a developed market country, or
(iii) that have at least 50% of their assets in, or derive at least 50% of their revenues or profits from, a developed market country.
Developed market countries currently include the countries comprising the Morgan Stanley Capital International World Index or countries considered to be developed by the World Bank, the International Finance Corporation or the United Nations. Under normal market conditions, the Fund will invest in at least 3 countries and at least 40% of its net assets in countries other than the United States.
The Fund also may invest up to 20% of its net assets in companies of emerging market countries and forward foreign currency exchange contracts and currency spot transactions used to hedge the Fund’s exposure to non-Developed Market currencies as well as any proxy currency hedging transactions involving non-Developed Market currencies determined by the Sub-Advisor to be representative of, and serve as a proxy for, Developed Market currencies. The equity securities of emerging market companies in which the Fund may invest include investments in common stock, depositary receipts, common
and preferred shares of REITs and business development companies (BDCs).
The securities in which the Fund may invest must be listed on a U.S. or non-U.S. securities exchange. The Fund may invest in small, mid and large capitalization companies.
In selecting the portfolio securities of the Fund, RiverFront Investment Group, LLC, the Fund’s sub adviser, assembles a portfolio of eligible securities based on several core attributes, including, but not limited to, value, quality and momentum. The Sub-Advisor will consider multiple factors within each core attribute, such as the price-to-book value of a security when determining value and a company’s cash as a percentage of the company’s market capitalization when determining quality. The Sub-Advisor then assigns each qualifying security a score based on its core attributes and selects the individual securities with the highest scores for investment. In doing so, the Sub-Advisor utilizes its proprietary optimization process to maximize the percentage of high-scoring securities included in the portfolio in accordance with country, sector and risk factor (e.g., beta, quality volatility) limitations. The Sub-Advisor will also consider the market capitalization of the companies in which the Fund may invest, and the trading volume of a company’s shares in the secondary market.
Fund’s Top 10 Holdings (04/15/16):
| Anheuser-Busch InBev SA/NV | 3.11% |
| Unilever, N.V. | 2.37% |
| Commonwealth Bank of Australia | 2.24% |
| Siemens AG | 2.24% |
| Sanofi | 1.92% |
| Telefonica, S.A. | 1.92% |
| Banco Santander S.A. | 1.75% |
| Bayer AG | 1.74% |
| Daimler AG | 1.73% |
| SAP SE | 1.55% |
Fund’s Country Allocation (04/15/16):
| France | 15.77% |
| Japan | 14.84% |
| Germany | 14.51% |
| United Kingdom | 13.48% |
| Australia | 7.93% |
| Spain | 7.36% |
| The Netherlands | 5.62% |
| Belgium | 4.32% |
| Finland | 2.78% |
| Switzerland | 2.78% |
Fund’s Sector Breakdown (04/15/16):
| Financials | 19.99% |
| Industrials | 16.30% |
| Consumer Staples | 15.65% |
| Consumer Discretionary | 14.68% |
| Health Care | 9.71% |
| Materials | 7.08% |
| Information Technology | 5.60% |
| Telecommunication Services | 5.05% |
| Energy | 3.59% |
| Utilities | 2.35% |
Useful Links:
RFDI Home Page
Category: Equities> International Equities> International Strategy
2.
FUND INFORMATION:
| Symbol: RFAP | Exchange: NASDAQ |
| Name: First Trust RiverFront Dynamic Asia Pacific ETF | Net Expense Ratio: 0.83% |
FUND OBJECTIVE:
The First Trust RiverFront Dynamic Asia Pacific ETF is an actively managed exchange-traded fund.
Under normal market conditions, the Fund will seek to achieve its investment objective by investing at least 80% of its net assets (including investment borrowings) in a portfolio of equity securities of Asian Pacific companies, including through investments in common stock, depositary receipts, and common and preferred shares of real estate investment trusts (REITs), and forward foreign currency exchange contracts and currency spot transactions used to hedge the Fund’s exposure to the currencies in which the equity securities of such Asian Pacific companies are denominated.
Asian Pacific companies are those companies:
(i) whose securities are traded principally on a stock exchange in an Asian Pacific country,
(ii) that have a primary business office in an Asian Pacific country, or
(iii) that have at least 50% of their assets in, or derive at least 50% of their revenues or profits from, an Asian Pacific country.
Asian Pacific countries include the countries located in Asia and the Pacific Islands as well as Australia and New Zealand. The Fund will generally focus its Asian Pacific company investments in Australia, Hong Kong, Japan, New Zealand and/or Singapore.
The Fund also may invest up to 20% of its net assets in equity securities of non-Asian Pacific companies, including companies in emerging market countries, with a particular focus on companies in the United States and Canada, and forward foreign currency exchange contracts and currency spot transactions used to hedge the Fund’s exposure to non-Asian Pacific currencies as well as any proxy currency hedging transactions involving non-Asian Pacific currencies determined by the Sub-Advisor to be representative of, and serve as a proxy for, Asian Pacific currencies. The securities in which the Fund may invest must be listed on a U.S. or non-U.S. securities exchange. The Fund may invest in small, mid and large capitalization companies.
In selecting the portfolio securities of the Fund, RiverFront Investment Group, LLC, the Fund’s sub-adviser, assembles a portfolio of eligible securities based on several core attributes, including, but not limited to, value, quality and momentum. The Sub-Advisor will consider multiple factors within each core attribute, such as the price-to-book value of a security when determining value and a company’s cash as a percentage of the company’s market capitalization when determining quality. The Sub-Advisor then assigns each qualifying security a score based on its core attributes and selects the individual securities with the highest scores for investment. In doing so, the Sub-Advisor utilizes its proprietary optimization process to maximize the percentage of high-scoring securities included in the portfolio in accordance with country, sector and risk factor (e.g., beta, quality volatility) limitations. The Sub-Advisor will also consider the market capitalization of the companies in which the Fund may invest, and the trading volume of a company’s shares in the secondary market.
Fund’s Top 10 Holdings (04/15/16):
| Commonwealth Bank of Australia | 8.26% |
| Westpac Banking Corporation | 4.71% |
| Mitsui Fudosan Company, Ltd. | 3.89% |
| Mitsubishi Estate Company, Ltd. | 3.76% |
| BHP Billiton Limited | 2.60% |
| Wesfarmers Limited | 2.46% |
| Toyota Motor Corporation | 2.43% |
| Westfield Corporation Limited | 2.41% |
| Sumitomo Realty & Development Co., Ltd. | 2.28% |
| CSL Limited | 2.05% |
Fund’s Country Allocation (04/15/16):
| Japan | 59.46% |
| Australia | 29.22% |
| Hong Kong | 7.33% |
| Canada | 1.38% |
| China | 0.98% |
| New Zealand | 0.91% |
| Singapore | 0.72% |
Fund’s Sector Breakdown (04/15/16):
| Financials | 35.70% |
| Industrials | 17.96% |
| Consumer Discretionary | 12.33% |
| Consumer Staples | 7.69% |
| Materials | 6.59% |
| Health Care | 6.09% |
| Telecommunication Services | 5.28% |
| Information Technology | 3.98% |
| Utilities | 2.52% |
| Energy | 1.86% |
Useful Links:
RFAP Home Page
Category: Equities> Regions> Asia> Broad Developed Asia
3.
FUND INFORMATION:
| Symbol: RFEU | Exchange: NASDAQ |
| Name: First Trust RiverFront Dynamic Europe ETF | Net Expense Ratio: 0.83% |
FUND OBJECTIVE:
The First Trust RiverFront Dynamic Europe ETF is an actively managed exchange-traded fund.
Under normal market conditions, the Fund will seek to achieve its investment objective by investing at least 80% of its net assets (including investment borrowings) in a portfolio of equity securities of European companies, including through investments in common stock, depositary receipts, and common and preferred shares of real estate investment trusts (REITs), and forward foreign currency exchange contracts and currency spot transactions used to hedge the Fund’s exposure to the currencies in which the equity securities of such European companies are denominated.
European companies are those companies (i) whose securities are traded principally on a stock exchange in a European country, (ii) that have a primary business office in a European country, or (iii) that have at least 50% of their assets in, or derive at least 50% of their revenues or profits from, a European country. The Fund considers a European country to be any member country of the European Union or any country included in the FTSE Developed Europe Index or the FTSE Emerging Europe All Cap Index. The Fund will generally focus its European company investments in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and/or the United Kingdom.
The Fund also may invest up to 20% of its net assets in equity securities of non-European companies, including companies in emerging market countries, with a particular focus on companies in Canada, Israel and the United States, and forward foreign currency exchange contracts and currency spot transactions used to hedge the Fund’s exposure to non-European currencies as well as any proxy currency hedging transactions involving non-European currencies determined by the Sub-Advisor to be representative of, and serve as a proxy for, European currencies. The securities in which the Fund may invest must be listed on a U.S. or non-U.S. securities exchange. The Fund may invest in small, mid and large capitalization companies.
In selecting the portfolio securities of the Fund, RiverFront Investment Group, LLC, the Fund’s sub-adviser, assembles a portfolio of eligible securities based on several core attributes, including, but not limited to, value, quality and momentum. The Sub-Advisor will consider multiple factors within each core attribute, such as the price-to-book value of a security when determining value and a company’s cash as a percentage of the company’s market capitalization when determining quality. The Sub-Advisor then assigns each qualifying security a score based on its core attributes and selects the individual securities with the highest scores for investment. In doing so, the Sub-Advisor utilizes its proprietary optimization process to maximize the percentage of high-scoring securities included in the portfolio in accordance with country, sector and risk factor (e.g., beta, quality volatility) limitations. The Sub-Advisor will also consider the market capitalization of the companies in which the Fund may invest, and the trading volume of a company’s shares in the secondary market.
Fund’s Top 10 Holdings (04/15/16):
| Anheuser-Busch InBev SA/NV | 4.19% |
| Unilever, N.V. | 3.19% |
| Siemens AG | 3.02% |
| Sanofi | 2.59% |
| Telefonica, S.A. | 2.58% |
| Banco Santander S.A. | 2.36% |
| Bayer AG | 2.34% |
| Daimler AG | 2.33% |
| SAP SE | 2.09% |
| Banco Bilbao Vizcaya Argentaria, S.A. | 2.04% |
Fund’s Country Allocation (04/15/16):
| France | 21.19% |
| Germany | 19.48% |
| United Kingdom | 18.12% |
| Spain | 9.85% |
| The Netherlands | 7.55% |
| Belgium | 5.79% |
| Switzerland | 3.77% |
| Finland | 3.75% |
| Italy | 2.75% |
| Norway | 2.61% |
Fund’s Sector Breakdown (04/15/16):
| Consumer Staples | 18.53% |
| Industrials | 16.29% |
| Consumer Discretionary | 15.61% |
| Financials | 14.15% |
| Health Care | 10.61% |
| Materials | 7.41% |
| Information Technology | 6.39% |
| Telecommunication Services | 4.77% |
| Energy | 4.12% |
| Utilities | 2.12% |
Useful Links:
RFEU Home Page
Category: Equities> Regions> Europe> Broad Europe> European Strategy