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First Trust TCW Securitized Plus ETF (DEED)
Investment Objective/Strategy - The First Trust TCW Securitized Plus ETF seeks to maximize long-term total return. Under normal market conditions, the Fund will invest at least 80% of its net assets (including investment borrowings) in securitized debt securities, including asset-backed securities, residential and commercial mortgage-backed securities and collateralized loan obligations ("CLOs"). The Fund's investment sub-advisor, TCW Investment Management Company LLC ("TCW" or the "Sub-Advisor") seeks to outperform the Bloomberg Barclays U.S. Mortgage-Backed Securities Index over a full market cycle through the utilization of independent, bottom-up research to identify securities that are undervalued and that offer a superior risk/reward profile. Under normal conditions, the Fund's average portfolio duration varies within two years (plus or minus) of the portfolio duration of the securities comprising the Bloomberg Barclays U.S. Mortgage-Backed Securities Index. As a separate measure, there is no limit on the weighted average maturity of the Fund's portfolio. While maturity refers to the expected life of a security, duration is a measure of the expected price volatility of a debt security as a result of changes in market rates of interest.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
Fund TypeMortgage-Backed Securities
Investment AdvisorFirst Trust Advisors L.P.
Investment Advisor/Portfolio ManagerTCW Investment Management Company LLC
Investor Servicing AgentBank of New York Mellon
Sub-AdvisorTCW Investment Management Company LLC
Fiscal Year-End08/31
ExchangeNYSE Arca
Inception Price$25.00
Inception NAV$25.00
Gross Expense Ratio*0.75%
Net Expense Ratio*0.65%
* As of 1/4/2021
First Trust has contractually agreed to waive management fees of 0.10% of average daily net assets until April 6, 2022.
Current Fund Data (as of 4/12/2021)
Closing NAV1$25.80
Closing Market Price2$25.80
Bid/Ask Midpoint$25.80
Bid/Ask Premium0.00%
30-Day Median Bid/Ask Spread30.15%
Total Net Assets$65,787,993
Outstanding Shares2,550,002
Daily Volume10,145
Average 30-Day Daily Volume73,085
Closing Market Price 52-Week High/Low$26.02 / $25.00
Closing NAV 52-Week High/Low$26.07 / $25.00
Number of Holdings (excluding cash)220
Top Holdings (as of 4/12/2021)*
Holding Percent
Fannie Mae or Freddie Mac TBA, 2%, due 12/01/2050 16.03%
U.S. Treasury Bill, 0%, due 05/25/2021 10.84%
Fannie Mae or Freddie Mac TBA, 2.50%, due 10/01/2050 10.50%
U.S. Treasury Bill, 0%, due 07/20/2021 6.90%
U.S. Treasury Note, 0.125%, due 02/28/2023 6.85%
U.S. Treasury Note, 0.75%, due 03/31/2026 4.45%
GNMA TBA, 2%, due 07/01/2050 4.11%
Fannie Mae or Freddie Mac TBA, 2.50%, due 10/01/2050 3.91%
Fannie Mae or Freddie Mac TBA, 2%, due 09/01/2035 3.62%
U.S. Treasury Note, 0.125%, due 03/31/2023 3.60%

* 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 4/13/2021)4$0.0420
30-Day SEC Yield (as of 3/31/2021)50.12%
Unsubsidized 30-Day SEC Yield (as of 3/31/2021)60.03%
Distribution Rate (as of 3/31/2021)71.96%
Fund Characteristics (as of 3/31/2021)
Weighted Average Effective Duration83.84 Years
Weighted Average Maturity6.13 Years
Fund Composition (as of 3/31/2021)
Agency MBS 54.63%
Non-Agency MBS 19.66%
US Government/Agency 18.53%
CMBS 9.23%
ABS 4.14%
Cash & Equivalents -6.19%
Maturity Exposure (as of 3/31/2021)
Years Percent
0-1 Year -4.56%
1-3 Years 16.44%
3-5 Years 23.96%
5-7 Years 21.97%
7-9 Years 39.80%
10-20 Years 1.78%
>20 Years 0.61%
Bid/Ask Premium/Discount (as of 4/12/2021)
  2020 Q1 2021 Q2 2021 Q3 2021
Days Traded at Premium 33 29 7 ---
Days Traded at Discount 138 32 0 ---
Credit Quality (as of 3/31/2021)
Government/Agency 67.38%
AAA 7.54%
AA+ 1.92%
AA 1.61%
AA- 0.34%
A+ 0.16%
A 0.76%
BBB 0.46%
BBB- 0.44%
BB 0.57%
BB- 0.06%
B+ 0.62%
B 0.37%
B- 1.81%
CCC 5.85%
CCC- 2.89%
CC 5.21%
C 0.28%
D 1.73%
The credit quality and ratings information presented above reflect the ratings assigned 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 lowest ratings are 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. U.S. Treasury, U.S. Agency and U.S. Agency mortgage-backed securities appear under "Government/Agency". Credit ratings are subject to change.
Month End Performance (as of 3/31/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) -0.16% -0.16% N/A N/A N/A N/A 4.80%
After Tax Held -0.30% -0.30% N/A N/A N/A N/A 4.01%
After Tax Sold -0.10% -0.10% N/A N/A N/A N/A 2.87%
Market Price 0.22% 0.22% N/A N/A N/A N/A 4.97%
Index Performance **
Bloomberg Barclays US Mortgage Backed Securities Index -1.10% -1.10% N/A N/A N/A N/A -0.61%
Quarter End Performance (as of 3/31/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) -0.16% -0.16% N/A N/A N/A N/A 4.80%
After Tax Held -0.30% -0.30% N/A N/A N/A N/A 4.01%
After Tax Sold -0.10% -0.10% N/A N/A N/A N/A 2.87%
Market Price 0.22% 0.22% N/A N/A N/A N/A 4.97%
Index Performance **
Bloomberg Barclays US Mortgage Backed Securities Index -1.10% -1.10% N/A N/A N/A N/A -0.61%

*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. The fund's performance reflects fee waivers and expense reimbursements, absent which performance would have been lower.

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.

Bloomberg Barclays US Mortgage Backed Securities Index - The Index tracks agency mortgage backed pass-through securities (both fixed-rate and hybrid ARM) guaranteed by Ginnie Mae, Fannie Mae, and Freddie Mac.

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 The unsubsidized 30-day SEC yield is calculated the same as the 30-day SEC yield, however it excludes contractual fee waivers and expense reimbursements.
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 4/29/2020

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.

ETF Characteristics

The fund lists and principally trades its shares on the NYSE Arca, Inc.

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 the fund by authorized participants, in very large creation/redemption units. If the 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 the fund's net asset value and possibly face delisting.

Risk Considerations

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. Some of the securities held by the fund may be illiquid. 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. The COVID-19 pandemic may last for an extended period of time, and will continue to impact the economy for the foreseeable future.

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

The fund may invest in securities concentrated in a particular asset class, industry or region which involves additional risks including limited diversification.

The fund is subject to credit risk, call risk, income risk, inflation risk, interest rate risk, extension risk and prepayment risk. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Credit risk is heightened for the bank loans in which the fund invests because companies that issue such loans tend to be highly leveraged and thus are more susceptible to the risks of interest deferral, default and/or bankruptcy. Call risk is the risk that if an issuer calls higher-yielding debt instruments held by the fund, performance could be adversely impacted. Income risk is the risk that income from the fund's fixed income investments could decline during periods of falling interest rates. Inflation risk is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. Interest rate risk is the risk that the value of the fixed income securities in the fund will decline because of rising market interest rates. Extension risk is the risk that, when interest rates rise, certain obligations will be paid off by the issuer (or obligor) more slowly than anticipated, causing the value of these securities to fall. Prepayment risk is the risk that during periods of falling interest rates, an issuer may exercise its right to pay principal on an obligation earlier than expected. This may result in a decline in the fund's income.

High-yield securities, or "junk" bonds, are subject to greater market fluctuations and risk of loss than securities with higher ratings, and therefore, may be highly speculative. These securities are issued by companies that may have limited operating history, narrowly focused operations, and/or other impediments to the timely payment of periodic interest and principal at maturity. Lower quality debt tends to be less liquid than higher quality debt.

Mortgage-related securities, including mortgage-backed securities, are more susceptible to adverse economic, political or regulatory events that affect the value of real estate. Mortgage- related securities are 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. Non-agency debt that are not issued by a government-sponsored entity such as Fannie Mae, Freddie Mac and Ginnie Mae, are not afforded the protections of backing by the U.S. government, making them more susceptible to credit, liquidity and other risks.

The use of listed and OTC derivatives, including futures, options, swap agreements and forward contracts, 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 the fund's portfolio managers use derivatives to enhance the 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 the fund.

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.

The impairment of the value of collateral or other assets underlying an asset-backed security, such as a result of non-payment of loans or non-performance of underlying assets, may result in a reduction in the value of such asset-backed securities and losses to the fund.

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

Illiquid securities and restricted securities involve the risk that the securities will not be able to be sold at the time desired by the fund or at prices approximately the value at which the fund is carrying the securities on its books.

Collateralized loan obligations ("CLOs") carry additional risks, including, the possibility that distributions from collateral securities will not be adequate to make interest or other payments, the quality of the collateral may decline in value or default, the possibility that the investments in CLOs are subordinate to other classes or tranches, and the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results.

If a counterparty defaults on its payment obligations, the fund will lose money and the value of fund shares may decrease. The fund's investment in repurchase agreements may be subject to market and credit risk with respect to the collateral securing the agreements.

The fund will, under most circumstances, effect a portion of creations and redemptions for cash, rather than in kind securities. As a result, the fund may be less tax efficient.

The fund currently has fewer assets than larger, more established funds, and like other relatively new funds, large inflows and outflows may impact the fund's market exposure for limited periods of time.

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 the fund or on certain instruments in which the fund invests can be difficult to ascertain, and they may vary depending on a variety of factors, and they could result in losses to the fund.

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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