First Trust, the sixth-largest U.S. issuer of exchange traded funds, adds another new ETF to its lineup today with the debut of the First Trust Enhanced Short Maturity ETF (NasdaqGM: FTSM).
The actively managed FTSM invests in short-duration, investment-grade securities with the objective of delivering current income while providing capital preservation.
“FTSM seeks to achieve its objectives by strategically laddering highly liquid investments over the near-term horizon. As market conditions change, the portfolio managers have the flexibility to strategically rotate among various market sectors while maintaining a focus on preservation of capital and liquidity,” according to a statement issued by First Trust.
The timing of FTSM’s launch could prove to be fortunate as investors continue pour capital into short-term bond ETFs in preparation of rising interest rates. In 2013, short-term bond funds added $36 billion in new assets, whereas long-term funds saw $8.7 billion in outflows. Over the first five months this year, short-term debt ETFs attracted $9.4 billion as well. [Bond ETFs Beloved in 2014]