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First Trust Long Duration Opportunities ETF (LGOV)
Investment Objective/Strategy - The First Trust Long Duration Opportunities ETF's (the "Fund") primary investment objective is to generate current income with a focus on preservation of capital. Under normal market conditions, the Fund will invest at least 80% of its net assets (including investment borrowings) in a portfolio of investment-grade debt securities issued or guaranteed by the U.S. government, its agencies or government-sponsored entities, including publicly-issued U.S. Treasury securities and mortgage-related securities. The Fund may also invest in exchange-traded funds ("ETFs") that principally invest in such securities. The Fund may purchase mortgage-related securities in "to-be-announced" transactions ("TBA Transactions"), including mortgage dollar rolls.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
TickerLGOV
Fund TypeGovernment Securities
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon Corp
CUSIP33738D606
ISINUS33738D6067
Intraday NAVLGOVIV
Fiscal Year-End10/31
ExchangeNYSE Arca
Inception1/22/2019
Inception Price$25.00
Inception NAV$25.00
Expense Ratio0.70%
Current Fund Data (as of 10/21/2021)
Closing NAV1$27.34
Closing Market Price2$27.31
Bid/Ask Midpoint$27.31
Bid/Ask Discount0.11%
30-Day Median Bid/Ask Spread30.36%
Total Net Assets$34,174,631
Outstanding Shares1,250,002
Daily Volume2,126
Average 30-Day Daily Volume6,997
Closing Market Price 52-Week High/Low$29.70 / $26.63
Closing NAV 52-Week High/Low$29.28 / $26.79
Number of Holdings (excluding cash)59
Top Holdings (as of 10/21/2021)*
Holding Percent
GNMA Series 2010-61, Class KE, 5%, due 05/16/2040 4.69%
FHLMC Multifamily Structured Pass Through Certs. Series K158, Class A2, Variable rate, due 12/25/2030 3.76%
U.S. Treasury Bond, 1.25%, due 05/15/2050 3.56%
FANNIE MAE Series 2005-74, Class NZ, 6%, due 09/25/2035 3.51%
FHLMC Multifamily Structured Pass Through Certs. Series K158, Class A3, Variable rate, due 10/25/2033 3.43%
FHLMC Multifamily Structured Pass Through Certs. Series K156, Class A3, Variable rate, due 06/25/2033 3.38%
Fannie Mae or Freddie Mac TBA, 2.50%, due 05/01/2051 2.99%
Fannie Mae Series 2015-66, Class CL, 3.50%, due 07/25/2041 2.98%
Fannie Mae Series 2016-101, Class ZP, 3.50%, due 01/25/2047 2.20%
GNMA Series 2020-159, Class Z, 2.50%, due 10/15/2062 2.17%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt (as of 10/24/2021)4$0.0372
30-Day SEC Yield (as of 9/30/2021)51.70%
12-Month Distribution Rate (as of 9/30/2021)62.70%
Distribution Rate (as of 9/30/2021)72.17%
Fund Characteristics (as of 9/30/2021)
Weighted Average Effective Duration89.65 Years
Weighted Average Effective Duration (Long Positions)810.46 Years
Weighted Average Effective Duration (Short Positions)8-0.81 Years
Weighted Average Effective Maturity16.88 Years
Fund Composition – Long Positions (as of 9/30/2021)
Percent
Agency CMBS 37.70%
Agency MBS CMOs 29.66%
U.S. Treasury Futures 12.67%
Cash & Cash Equivalents 11.63%
Agency MBS Pass-Throughs 4.75%
U.S. Treasuries 3.57%
Other 0.02%
Bid/Ask Premium/Discount (as of 10/21/2021)
  2020 Q1 2021 Q2 2021 Q3 2021
Days Traded at Premium 182 39 30 26
Days Traded at Discount 71 22 33 38
Credit Quality (as of 9/30/2021)
Government & Agency 88.37%
Cash & Cash Equivalents 11.63%
The ratings are by one or more nationally recognized statistical rating organizations (NRSROs), including Standard & Poor's Rating Group, a division of the McGraw Hill Companies, Inc., 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 ratings are used. A credit rating is an assessment provided by a NRSRO, of the creditworthiness of an issuer with respect to debt obligations. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). Investment grade is defined as those issuers that have a long-term credit rating of BBB- or higher. "NR" indicates no rating. 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. U.S. Treasury, U.S. Agency and U.S. Agency mortgage-backed securities appear under "Government". Credit ratings are subject to change.
Hypothetical Growth of $10,000 Since Inception (as of 10/21/2021) *


Month End Performance (as of 9/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) -0.29% -2.48% -3.47% N/A N/A N/A 7.26%
After Tax Held -0.53% -3.35% -4.78% N/A N/A N/A 5.82%
After Tax Sold -0.17% -1.47% -2.05% N/A N/A N/A 4.99%
Market Price -0.44% -2.96% -3.97% N/A N/A N/A 7.22%
Index Performance **
ICE BofA 5+ Year US Treasury Index -0.06% -5.25% -7.06% N/A N/A N/A 6.64%
Quarter End Performance (as of 9/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) -0.29% -2.48% -3.47% N/A N/A N/A 7.26%
After Tax Held -0.53% -3.35% -4.78% N/A N/A N/A 5.82%
After Tax Sold -0.17% -1.47% -2.05% N/A N/A N/A 4.99%
Market Price -0.44% -2.96% -3.97% N/A N/A N/A 7.22%
Index Performance **
ICE BofA 5+ Year US Treasury Index -0.06% -5.25% -7.06% N/A N/A N/A 6.64%

*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.

After Tax Held returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold returns represent the return after taxes on distributions and the sale of fund shares. 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.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

**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 5+ Year US Treasury Index - The Index is a subset of ICE BofA US Treasury Index including all securities with a remaining term to final maturity greater than or equal to 5 years.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares .
2 Fund shares are purchased and sold on an exchange at their market price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 The median bid-ask spread is calculated by identifying the national best bid and national best offer ("NBBO") for the fund as of the end of each 10 second interval during each trading day of the last 30 calendar days and dividing the difference between each such bid and offer by the midpoint of the NBBO. The median of those values is identified and that value is expressed as a percentage rounded to the nearest hundredth.
4 Most recent distribution paid or declared to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
5 The 30-day SEC yield is calculated by dividing the net investment income per share earned during the most recent 30-day period by the maximum offering price per share on the last day of the period and includes the effects of fee waivers and expense reimbursements, if applicable.
6 12-Month Distribution Rate is calculated by dividing the sum of the fund's trailing 12-month ordinary distributions paid or declared by the NAV price. Distribution rates may vary.
7 Distribution Rate is calculated by dividing the fund's most recent ordinary distribution paid or declared, on an annualized basis, by the NAV price. Distribution rates may vary.
8 A measure of a bond's sensitivity to interest rate changes that reflects the change in a bond's price given a change in yield. It accounts for the likelihood of changes in the timing of cash flows in response to interest rate movements.
9 Inception Date is 1/22/2019

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.

Risk Considerations

Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Market prices may differ to some degree from the net asset value of the shares. Investors who sell fund shares may receive less than the share's net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, unlike mutual funds, shares 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 discount to a fund's net asset value and possibly face delisting.

A fund's shares will change in value, and you could lose money by investing in a fund. One of the principal risks of investing in a fund is market risk. Market risk is the risk that a particular stock owned by a fund, fund shares or stocks in general may fall in value. There can be no assurance that a fund's investment objective will be achieved. The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. While the development of vaccines has slowed the spread of the virus and allowed for the resumption of "reasonably" normal business activity in the United States, many countries continue to impose lockdown measures in an attempt to slow the spread. Additionally, there is no guarantee that vaccines will be effective against emerging variants of the disease.

In managing a fund's investment portfolio, the portfolio managers will apply investment techniques and risk analyses that may not have the desired result.

A fund that effects all or a portion of its creations and redemptions for cash rather than in-kind may be less tax-efficient.

A fund may be subject to the risk that a counterparty will not fulfill its obligations which may result in significant financial loss to a fund.

As the use of Internet technology has become more prevalent in the course of business, funds have become more susceptible to potential operational risks through breaches in cyber security.

Certain securities are subject to call, credit, inflation, income, interest rate, extension and prepayment risks. These risks could result in a decline in a security's value and/or income, increased volatility as interest rates rise or fall and have an adverse impact on a fund's performance.

The use of derivatives, including futures, options and swap agreements, can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. These risks are heightened when a fund's portfolio managers use derivatives to enhance a fund's returns or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by a fund.

A fund may be a constituent of one or more indices which could greatly affect a fund's trading activity, size and volatility.

Leverage may result in losses that exceed the amount originally invested and may accelerate the rates of losses.

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. The United Kingdom's Financial Conduct Authority, which regulates LIBOR, will cease making LIBOR available as a reference rate over a phase-out period that will begin immediately after December 31, 2021. 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 can be difficult to ascertain, and they may vary depending on a variety of factors, and they could result in losses to a 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.

Mortgage-related securities are more susceptible to adverse economic, political or regulatory events that affect the value of real estate. They are also subject to the risk that the rate of mortgage prepayments decreases, which extends the average life of a security and increases the interest rate exposure.

A fund classified as "non-diversified" may invest a relatively high percentage of its assets in a limited number of issuers. As a result, a fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain 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.

High portfolio turnover may result in higher levels of transaction costs and may generate greater tax liabilities for shareholders.

Short selling creates special risks which could result in increased gains or losses and volatility of returns. Because losses on short sales arise from increases in the value of the security sold short, such losses are theoretically unlimited.

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.

The purchase of TBA ("to be announced") securities may give rise to investment leverage and increase a fund's volatility. In addition, default by, or bankruptcy of, a counterparty to a TBA transaction would expose a fund to possible losses.

Trading on the exchange may be halted due to market conditions or other reasons. There can be no assurance that the requirements to maintain the listing of a fund on the exchange 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.

Due to the lack of centralized information and trading, and variations in lot sizes of certain debt securities, the valuation of debt securities may carry more uncertainty and risk than that of publicly traded securities.

A fund may invest in securities that exhibit more volatility than the market as a whole.

First Trust Advisors L.P. is the adviser to the fund. First Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P., the fund’s distributor.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
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