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First Trust TCW Emerging Markets Debt ETF (EFIX)
Investment Objective/Strategy - The First Trust TCW Emerging Markets Debt ETF (the "Fund") seeks to provide high total return from current income and capital appreciation. Under normal market conditions, the Fund will invest at least 80% of its net assets (including investment borrowings) in debt securities issued or guaranteed by companies, financial institutions and government entities located in emerging market countries. An "emerging market country" is a country that, at the time the Fund invests in the related security or instrument, is classified as an emerging or developing economy by any supranational organization such as the World Bank or the United Nations, or related entities, or is considered an emerging market country for purposes of constructing a major emerging market securities index. The Fund's investments include, but are not limited to, debt securities issued by sovereign entities, quasi-sovereign entities and corporations. "Quasi-Sovereign" refers to an entity that is either 100% owned by a sovereign entity or whose debt is 100% guaranteed by a sovereign entity. The Fund may invest up to 25% of its net assets in securities issued by non-Quasi-Sovereign corporations in emerging market countries. The Fund will invest at least 90% of its assets in dollar-denominated securities. The Fund may invest up to 10% of its assets in securities denominated in Eurodollars and/or Japanese yen.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
TickerEFIX
Fund TypeEmerging Market Bonds
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
Portfolio Manager/Sub-AdvisorTCW Investment Management Company LLC
CUSIP33740U604
ISINUS33740U6047
Intraday NAVEFIXIV
Fiscal Year-End08/31
ExchangeNYSE Arca
Inception2/17/2021
Inception Price$20.00
Inception NAV$20.00
Gross Expense Ratio*0.95%
Net Expense Ratio*0.85%
* As of 2/12/2021
First Trust has contractually agreed to waive management fees of 0.10% of average daily net assets until February 12, 2023.
Current Fund Data (as of 5/12/2021)
Closing NAV1$19.67
Closing Market Price2$19.51
Bid/Ask Midpoint$19.51
Bid/Ask Discount0.81%
30-Day Median Bid/Ask Spread30.51%
Total Net Assets$19,669,946
Outstanding Shares1,000,002
Daily Volume2
Average 30-Day Daily Volume3,747
Closing Market Price 52-Week High/Low$20.05 / $19.17
Closing NAV 52-Week High/Low$20.08 / $19.27
Number of Holdings (excluding cash)89
Top Holdings (as of 5/12/2021)*
Holding Percent
STATE OF QATAR 3.75%, due 04/16/2030 2.32%
ARAB REPUBLIC OF EGYPT 8.50%, due 01/31/2047 2.13%
KAZMUNAYGAS NATIONAL CO 3.50%, due 04/14/2033 2.13%
STUDIO CITY FINANCE LTD 5%, due 01/15/2029 2.09%
UKRAINE GOVERNMENT 7.75%, due 09/01/2027 1.95%
KINGDOM OF BAHRAIN N/C, 6%, due 09/19/2044 1.92%
ARAB REPUBLIC OF EGYPT 7.0529%, due 01/15/2032 1.72%
INDONESIA ASAHAN ALUMINI 5.45%, due 05/15/2030 1.63%
DOMINICAN REPUBLIC 4.875%, due 09/23/2032 1.61%
UNITED MEXICAN STATES 4.28%, due 08/14/2041 1.57%

* 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 5/13/2021)4$0.0700
30-Day SEC Yield (as of 4/30/2021)53.89%
Unsubsidized 30-Day SEC Yield (as of 4/30/2021)63.79%
Distribution Rate (as of 4/30/2021)74.27%
Fund Characteristics (as of 3/31/2021)
Weighted Average Effective Duration87.60 Years
Weighted Average Maturity11.60 Years
Top Country Exposure (as of 4/30/2021)
Country Percent
Mexico 7.40%
Saudi Arabia 4.74%
Oman 4.34%
China 4.18%
South Africa 4.18%
Egypt 3.88%
Indonesia 3.80%
Qatar 3.76%
India 3.60%
Turkey 3.19%
Fund Composition (as of 4/30/2021)
Percent
Sovereigns 62.59%
Corporates 24.83%
Quasi-Sovereigns 10.66%
Cash 1.92%
Maturity Exposure (as of 4/30/2021)
Years Percent
0 - 0.99 Years 1.01%
10.0 - 19.99 Years 28.95%
20 Years & Over 27.57%
3.0 - 4.99 Years 3.65%
5.0 - 6.99 Years 10.09%
7.0 - 9.99 Years 23.45%
1.0 - 2.99 Years 3.36%
Bid/Ask Premium/Discount (as of 5/12/2021)
  2020 Q1 2021 Q2 2021 Q3 2021
Days Traded at Premium --- 6 6 ---
Days Traded at Discount --- 24 23 ---
Credit Quality (as of 4/30/2021)
AA 4.75%
A 7.31%
BBB 17.71%
BB 30.48%
B 35.40%
CCC 2.42%
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.
Hypothetical Growth of $10,000 Since Inception (as of 5/12/2021) *


Month End Performance (as of 4/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) N/A N/A N/A N/A N/A N/A -0.94%
After Tax Held N/A N/A N/A N/A N/A N/A -1.23%
After Tax Sold N/A N/A N/A N/A N/A N/A -0.56%
Market Price N/A N/A N/A N/A N/A N/A -0.94%
Index Performance **
JP Morgan Emerging Market Bond Index Global Diversified N/A N/A N/A N/A N/A N/A -0.57%
Quarter End Performance (as of 3/31/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) N/A N/A N/A N/A N/A N/A -3.10%
After Tax Held N/A N/A N/A N/A N/A N/A -3.24%
After Tax Sold N/A N/A N/A N/A N/A N/A -1.84%
Market Price N/A N/A N/A N/A N/A N/A -3.10%
Index Performance **
JP Morgan Emerging Market Bond Index Global Diversified N/A N/A N/A N/A N/A N/A -2.72%

*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.

JP Morgan Emerging Market Bond Index Global Diversified - The Index is a uniquely weighted USD-denominated emerging markets sovereign index.

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 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 2/17/2021

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. 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.

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

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

An investment in a fund containing securities of non-U.S. issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers. These risks may be heightened for securities of companies located in, or with significant operations in, emerging market countries.

It is important to note that investments in securities issued by companies operating in emerging market countries involve additional risks relating to political, economic, or regulatory conditions not associated with investments in securities and instruments issued by U.S. companies or by companies operating in other developed market countries. Please note that there can be no assurance that emerging market assets will increase in value over any given time period or that the fund will benefit from any increase in value.

Changes in currency exchange rates and the relative value of non-US currencies may affect the value of a fund’s investments and the value of a fund’s shares.

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 floating rate 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.

Investments in sovereign bonds involve special risks because the governmental authority that controls the repayment of the debt may be unwilling or unable to repay the principal and/or interest when due. In times of economic uncertainty, the prices of these securities may be more volatile than those of corporate debt obligations or of other government debt obligations.

Senior floating-rate loans are usually rated below investment grade but may also be unrated. As a result, the risks associated with these loans are similar to the risks of high-yield fixed income instruments. 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.

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.

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.

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.

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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