First Trust Municipal CEF Income Opportunity ETF (MCEF)
  • 2021 Estimated Capital Gain Distributions
    Certain First Trust Exchange-Traded Funds are expected to pay a short term and/or long-term capital gain distribution in December. For a list of exchange-traded funds expected to pay a capital gain distribution, please click here. Final determination of the source and tax status of all distributions paid in the current year are to be made after year-end and could differ from the expectations noted above.
Investment Objective/Strategy - The First Trust Municipal CEF Income Opportunity ETF is an actively managed exchange-traded fund. The Fund's investment objective is 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 (collectively, “Municipal Securities”).
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
Fund TypeTax-Free Fixed Income
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon Corp
Fiscal Year-End08/31
Inception Price$20.05
Inception NAV$20.05
Fees And Expenses
Management Fees0.75%
Acquired Fund Fees and Expenses1.90%
Total Annual Expenses2.65%
Current Fund Data (as of 11/26/2021)
Closing NAV1$20.77
Closing Market Price2$20.77
Bid/Ask Midpoint$20.77
Bid/Ask Premium0.00%
30-Day Median Bid/Ask Spread30.43%
Total Net Assets$19,735,334
Outstanding Shares950,002
Daily Volume5,220
Average 30-Day Daily Volume9,010
Closing Market Price 52-Week High/Low$21.67 / $19.73
Closing NAV 52-Week High/Low$21.63 / $19.71
Number of Holdings (excluding cash)33
Top Holdings (as of 11/26/2021)*
Holding Percent
Nuveen AMT-Free Municipal Credit Income Fund 5.01%
Nuveen AMT-Free Quality Municipal Income Fund 4.92%
Nuveen Quality Municipal Income Fund 4.47%
Nuveen Municipal Credit Income Fund 4.44%
BlackRock MuniHoldings Quality Fund II, Inc. 4.17%
BlackRock MuniYield Quality Fund III, Inc. 4.05%
Invesco Quality Municipal Income Trust 3.96%
VanEck High Yield Muni ETF 3.94%
Nuveen Dynamic Municipal Opportunities Fund 3.88%
Nuveen Enhanced Municipal Value Fund 3.80%

* Excluding cash.  Holdings are subject to change.

Top State Exposure (as of 10/29/2021)
State Percent
Illinois 11.77%
California 9.93%
New York 8.71%
Texas 7.73%
Florida 7.38%
Fund Composition (as of 10/29/2021)
CEF 89.28%
ETF 6.93%
Cash 3.79%
NAV History (Since Inception)
Past performance is not indicative of future results.
Overall Morningstar RatingTM (as of 10/31/2021)4

Among 152 funds in the Muni National Long category. This fund was rated 5 stars/152 funds (3 years), 5 stars/123 funds (5 years) based on risk adjusted returns.
Distribution Information
Dividend per Share Amt (as of 11/29/2021)5$0.0625
30-Day SEC Yield (as of 10/29/2021)63.57%
Taxable Equivalent 30-Day SEC Yield (as of 10/29/2021)76.02%
12-Month Distribution Rate (as of 10/29/2021)83.64%
Distribution Rate (as of 10/29/2021)93.64%
Taxable Equivalent Annualized Distribution Rate (as of 10/29/2021)106.14%
Fund Characteristics (as of 10/29/2021)
Weighted Average Option-Adjusted Duration115.89 Years
Weighted Average Leverage Option-Adjusted Duration128.62 Years
Weighted Average Effective Maturity7 Years
Weighted Average Leverage1328.70%
Weighted Average Premium/Discount14-1.95%
Credit Quality (as of 10/29/2021)
Credit Quality Percent
AAA 6.07%
AA 25.86%
A 23.23%
BBB 17.82%
BB 7.06%
B 1.95%
CCC-D 1.16%
N/R 16.85%
The ratings are by Standard & Poor's except where otherwise indicated. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations except for those debt obligations that are only privately rated. 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. Credit ratings are subject to change.
Bid/Ask Premium/Discount (as of 11/26/2021)
  2020 Q1 2021 Q2 2021 Q3 2021
Days Traded at Premium 165 53 48 49
Days Traded at Discount 88 8 15 15
Weighted Avg Premium/Discount14
Current Weighted Average Premium Discount Information (as of 11/26/2021)
52-Week Average-2.06%
52-Week High0.77%
52-Week Low-5.32%
Top Sector Exposure (as of 10/29/2021)
National Municipal Leveraged 78.40%
National Municipal ETF 6.93%
National Municipal High Yield 3.91%
Cash 3.79%
Term Fund 3.03%
National Municipal Non-Leveraged 2.72%
Hypothetical Growth of $10,000 Since Inception (as of 11/26/2021) *

Month End Performance (as of 10/29/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) -3.41% 5.08% 12.71% 10.22% 5.30% N/A 4.14%
After Tax Held -3.76% 3.81% 11.06% 8.72% 3.78% N/A 2.64%
After Tax Sold -2.02% 3.01% 7.51% 7.26% 3.38% N/A 2.48%
Market Price -3.59% 4.92% 12.65% 10.20% 5.25% N/A 4.13%
Index Performance **
Bloomberg Municipal Bond Index -1.38% 0.50% 2.64% 5.17% 3.41% N/A 3.12%
First Trust Municipal Closed-End Fund Total Return Index -3.50% 5.31% 13.06% 11.77% 6.22% N/A 4.80%
Quarter End Performance (as of 9/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) -1.81% 5.48% 12.54% 9.31% 4.39% N/A 4.29%
After Tax Held -2.16% 4.32% 10.88% 7.82% 2.88% N/A 2.78%
After Tax Sold -1.07% 3.24% 7.40% 6.54% 2.66% N/A 2.59%
Market Price -1.72% 5.52% 12.81% 9.36% 4.34% N/A 4.32%
Index Performance **
Bloomberg Municipal Bond Index -0.27% 0.79% 2.63% 5.06% 3.26% N/A 3.23%
First Trust Municipal Closed-End Fund Total Return Index -1.65% 5.88% 13.27% 10.46% 5.06% N/A 4.99%
3-Year Statistics (as of 10/29/2021)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
MCEF 8.88% -0.65 0.92 1.01 0.99
Bloomberg Municipal Bond Index 4.03% 0.17 0.37 0.99 0.87
First Trust Municipal Closed-End Fund Total Return Index 9.61% --- 1.00 1.09 1.00
Standard Deviation is a measure of price variability (risk). Alpha is an indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.Beta is a measure of price variability relative to the market. Sharpe Ratio is a measure of excess reward per unit of volatility. Correlation is a measure of the similarity of performance.

*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.

Prior to August 2019, the fund's benchmark was the Morningstar US National & High Yield Municipal CEF Index. The prior benchmark is no longer shown because the Morningstar Index used was closed in August 2019.

Bloomberg Municipal Bond Index - The Index is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market.

First Trust Municipal Closed-End Fund Total Return Index - The Index is a cap weighted index (based on NAV) designed to provide a broad representation of the national municipal closed-end fund universe. Funds included in the index trade on an U.S. Stock Exchange and have a market cap of at least $100 million.

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.
The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
5 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.
6 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.
7 The taxable equivalent yield is for illustrative purposes only. This information illustrates approximately what you would have to earn on taxable investments to equal the tax-exempt yield using the highest federal tax bracket and Medicare tax for 2021. This information is based on present law as of the date of publication and does not account for any proposed changes in tax rates. This information does not account for limitations on deductions, the alternative minimum tax or taxes other than Federal personal income tax and Medicare tax.
8 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.
9 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.
10 The taxable equivalent annualized distribution rate is for illustrative purposes only. This information illustrates approximately what you would have to earn on taxable investments to equal the tax-exempt annualized distribution rate using the highest federal tax bracket and Medicare tax for 2021. This information is based on present law as of the date of publication and does not account for any proposed changes in tax rates. This information does not account for limitations on deductions, the alternative minimum tax or taxes other than Federal personal income tax and Medicare tax.
11 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 and is adjusted for option provisions.
12 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 that is adjusted for option provisions and the leveraging process.
13 The use of various financial instruments or borrowed capital to increase the potential return of an investment.
14 A premium occurs when an underlying fund's market price is higher than its NAV, and a discount occurs when an underlying fund's market price is lower than its NAV.
15 Inception Date is 9/27/2016

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.

All or a portion of a fund's otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal and state alternative minimum tax.

Because the shares of CEFs cannot be redeemed upon demand, shares of many CEFs will trade on exchanges at market prices rather than net asset value, which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).

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, prepayment and zero coupon 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 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.

Distressed securities are illiquid or trade in low volumes and thus may be more difficult to value.

A fund may invest in the shares of CEFs and other ETFs, which involves additional expenses that would not be present in a direct investment in the underlying funds. In addition, a fund's investment performance and risks may be related to the investment performance and risks of the underlying funds.

The market value of floating rate securities may fall in a declining interest rate environment and may also fall in a rising interest rate environment if there is a lag between the rise in interest rates and the reset. Income earned by a fund on floating rate securities may decline due to lower coupon payments on floating rate securities.

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.

An underlying fund may invest in inverse floating rate securities which create effective leverage and thus, the value of the inverse floater will increase and decrease to a significantly greater extent. Custodial receipt trusts may issue inverse floater securities and if an underlying fund were to hold inverse floaters issued by custodial receipt trusts, the underlying fund would be subject to the risks of inverse floaters.

A fund's investment in other investment companies is restricted by restricted by federal securities laws and a fund's associated exemptive relief which limits the size of the position a fund can take in another investment company.

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.

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.

Participation interests in municipal leases pose special risks because many leases and contracts contain "non-appropriation" clauses that provide that the governmental issuer has no obligation to make future payments under the lease or contract unless money is appropriated for this purpose by the appropriate legislative body.

Inventories of municipal securities have decreased in recent years and some municipal securities may have resale restrictions lessening the ability to make a market in these securities. This reduction in market making capacity has the potential to decrease a fund's ability to buy or sell municipal securities and increase price volatility and trading costs.

The values of municipal securities may be adversely affected by local political and economic conditions and developments. Income from municipal securities could be declared taxable because of, among other things, unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of an issue.

There is no assurance that a fund will be able to sell a portfolio security at the price established by a pricing service, which could result in a loss to a fund.

The securities held in an escrow fund pledged to pay the principal and interest of a pre-refunded bond do not guarantee the price of the bond.

Private activity bonds can have a substantially different credit profile than the municipality or public authority that issued them and may be negatively impacted by conditions affecting the credit of the use of the project or the project itself.

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.

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.

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.

©2021 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.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value