First Trust, the sixth-largest U.S. issuer of exchange traded funds, will introduce the First Trust Strategic Income ETF (NasdaqGM: FDIV) today.
The new actively managed ETF is multi-strategy fund that generates income through positions in various asset classes, including high-yield bonds and senior loans, mortgage-related securities, preferred securities, international sovereign bonds, master limited partnerships (MLPs) and energy infrastructure companies, and dividend stocks.
The fund’s primary investment objective is to seek risk-adjusted income. The fund’s secondary investment objective is capital appreciation. The fund will seek to achieve its investment objectives using multiple investment categories, targeted investment strategies and specialized management teams, said First Trust in a statement.
FDIV will be the eleventh actively managed ETF issued by First Trust. Increased demand for the products and the potential for a more favorable regulatory environment could make actively managed ETFs a $500 billion asset class by 2020, according to a new report by SEI Investments.
Illinois-based First Trust has previously found success with actively managed offerings, including the $825.1 million First Trust North American Energy Infrastructure Fund (NYSEArca: EMLP) and the $199.6 million First Trust Senior Loan ETF (NasdaqGM: FTSL).