The combination of an Average People Pillar rating and a Low Process Pillar rating limit  First Trust Commercial Mortg Opports ETF to a Morningstar Medalist Rating of Negative.  The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy gets a Low Process Pillar rating. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution. First Trust Commercial Mortg Opports ETF earns a Low Process Pillar rating.    The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 29%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup. The parent firm's subpar risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 2.7 stars, also limits the process. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. The parent firm's five-year retention rate of 67% weakens the process further.

 The investment strategy as stated in the fund's prospectus is as follows: 


The investment seeks to maximize long-term total return.  Under normal market conditions, the fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in commercial mortgage-backed securities (”CMBS”). The Advisor intends to invest at least 80%, and generally expects to invest at least 90% of its net assets in CMBS with a "AAA" rating (or equivalent) at the time of purchase, and as determined by at least one nationally recognized statistical rating organization (“NRSRO”). The fund is non-diversified.

Process

First Trust Commercial Mortg Opports ETF earns an Average People Pillar rating. James W. Snyder, the longest-tenured manager on the strategy, boasts over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they manage is 5.0 stars, demonstrating excellent risk-adjusted performance compared to category peers. James W. Snyder has an experienced backdrop of support. The three listed managers boast 14 years of average listed portfolio management experience. As a team, they manage five investment vehicles together, with a Neutral asset-weighted average Morningstar Medalist Rating, indicating the team will struggle to deliver positive alpha in aggregate. None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders.

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

Average

People

First Trust meets the industry standard for stewardship, but it could do more to align itself with investors. It earns an Average Parent rating.

This is a team-oriented organization that eschews star managers. While exchange-traded funds represent the bulk of the firm's assets, First Trust bypasses the competitive market for low-cost beta funds, instead opting for complex strategies with higher management fees. However, the firm's focus on ETFs for future product development underpins its commitment to tax efficiency and transparency. Some of its thematic strategies appear trendy, but it stands behind them and rarely liquidates funds. 

The firm is a private partnership, controlled by Jim Bowen, the CEO. Many senior managers are limited partners. This ownership structure helps the firm stay focused on the long term and promotes retention, which has been strong for the investment team. The firm has grown considerably over the past decade and is among the largest providers of actively managed ETFs, as well as unit investment trusts. As it has grown, the firm has expanded its investment team and beefed up its technology infrastructure.

First Trust's focus is on educating advisors and providing them solutions. This may benefit investors indirectly, but First Trust could do more to directly align with investors by cutting fees and limiting trendy strategies.

Parent

First Trust Commercial Mortgage Opportunities ETF

CAAA is an actively managed fund that primarily invests in commercial mortgage-backed securities with a credit rating of AAA. The fund seeks to provide long-term total return.

FT Cboe Vest DJIA Dogs 10 Target Income ETF

First Trust California Municipal High Income ETF

First Trust SSI Strategic Convertible Securities ETF

FT Vest Dow Jones Internet & Target Income ETF

First Trust Emerging Markets Local Currency Bond ETF

First Trust Intermediate Duration Investment Grade Corporate ETF

First Trust TCW Opportunistic Fixed Income ETF

First Trust Managed Municipal ETF

First Trust Municipal High Income ETF

First Trust New York Municipal High Income ETF

First Trust Preferred Securities & Income ETF

First Trust Institutional Preferred Securities & Income ETF

First Trust Limited Duration Investment Grade Corporate ETF

First Trust Short Duration Managed Municipal ETF

First Trust Core Investment Grade ETF

First Trust BuyWrite Income

First Trust Exchange-Traded Fund VI First Trust Nasdaq BuyWrite Income ETF

First Trust Senior Loan Fund

First Trust Ultra Short Duration Municipal ETF

First Trust Strategic Income Fund

First Trust Tactical High Yield ETF

CBOE Vest S&P 500 Dividend Aristocrats Target Income ETF

First Trust Low Duration Strategic Focus ETF

First Trust Long Duration Opportunities ETF

First Trust Low Duration Opportunities ETF

First Trust Multi-Asset Diversified Income Index Fund

First Trust Municipal CEF Income Opportunity ETF

First Trust Intermediate Government Opportunities ETF

FT Cboe Vest Rising Dividend Achievers Target Income Etf

First Trust Structured Credit Income Opportunities ETF

FT Cboe Vest SMID Rising Dividend Achievers Target Income ETF

FT Cboe Vest Technology Dividend Target Income ETF

First Trust TCW Unconstrained Plus Bond ETF

WHEATON, Ill.--(BUSINESS WIRE)--First Trust Advisors L.P. ("FTA") announces the declaration of the monthly distributions for certain exchange-traded funds advised by FTA. The following dates apply to today's distribution declarations: Expected Ex-Dividend Date: April 23, 2024 Record Date: April 24, 2024 Payable Date: April 30, 2024 Ticker   Exchange   Fund Name   Frequency   Ordinary Income Per Share Amount   ACTIVELY MANAGED EXCHANGE-TRADED FUNDS   First Trust Exchange-Traded Fund III FCAL   N.

First Trust Advisors L.P. Announces Distributions for Exchange-Traded Funds

On Wednesday, First Trust added to its expansive ETF library by releasing the First Trust Commercial Mortgage Opportunities ETF (NYSE Arca: CAAA) and the First Trust Structured Credit Income Opportunities ETF (NYSE Arca: SCIO). Mortgage-Backed Securities CAAA has an expense ratio of 0.55% and focuses investment on commercial mortgage-backed securities.

First Trust Adds 2 New Active ETFs

WHEATON, Ill.--(BUSINESS WIRE)--First Trust Advisors L.P. (“First Trust”), a leading exchange-traded fund (“ETF”) provider and asset manager, announced today that it has launched two new actively managed ETFs, the First Trust Commercial Mortgage Opportunities ETF (NYSE Arca: CAAA) and the First Trust Structured Credit Income Opportunities ETF (NYSE Arca: SCIO) (collectively, “the funds”). The addition of CAAA and SCIO expands First Trust's overall taxable fixed income ETF lineup to a total of 1.

First Trust ETF Lineup Reaches 235 Funds with the Launch of Two Actively Managed Fixed Income Funds

News for First Trust Commercial Mortgage Opportunities ETF ETF (CAAA)