First Trust Strategic Income ETF: A Flexible Multi-Asset Fund

Summary

FDIV is an actively managed multi-asset ETF.
FDIV is flexible; managers can cut exposure in an asset class to 0% or raise it as high as 50%.
FDIV needs a longer track record, but the strategy is promising.

Multi-asset ETFs offer investors diversification within a single ETF. Stocks, bonds, preferred stock, REITs, MLPs and commodities are some of the assets that can be found in a multi-asset fund. These funds are attractive to investors due to the promise of diversification and sometimes high yields, but investors need to dig into the details to figure out how the fund is constructed.

First Trust Strategic Income ETF (NASDAQ:FDIV) is the latest of the multi-asset ETFs, launched on August 13, 2014. It is an actively managed multi-asset ETF.

Index & Strategy

FDIV is an actively managed ETF. The First Trust Investment Committee determines the allocation between the various asset classes, and then sub-advisers select the investments for each class. The Investment Committee considers factors such as momentum, fundamental value, an economic outlook and other factors in determining how much to allocate each asset class. Rebalancing is “generally on a quarterly basis.”… To continue reading, please Click Here.

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