George Douglas, Chief Investment Officer at SSI Investment Management – sub-advisor to the fund- said, “During times of market uncertainty, investors may turn to convertible securities for a compelling investment opportunity. Convertible securities, as an asset class, have historically captured a high portion of equity returns with substantial truncation on the downside, providing a compelling investment over time.”
First Trust believes convertible securities are a special type of asset class that benefit from an active management approach. iShares Convertible Bond ETF (ICVT) and SPDR Barclays Convertible Securities ETF (CWB) are both available to investors but take a passive approach to management with similar expense ratios of 0.35% and 0.40%, respectively. First Trust argues the ability to continuously adjust and re-balance without the restrictions of a specific index give FCVT both alpha generating and defensive qualities.
FCVT will open with a 0.35% expense ratio.