The managers will mainly focus on fixed-income assets they believe to be relatively undervalued. TCW’s active approach targets alpha primarily through sector allocation and security selection, and their strategy incorporates duration management, yield curve positioning and opportunistic trade execution.
Additionally, the active ETF will seek to achieve a duration that varies within one year of the portfolio duration of the Bloomberg Barclays U.S. Aggregate bond Index.
“We believe fixed income markets provide significant opportunities for active managers to add value,” Ryan Issakainen, CFA, Senior Vice President and ETF Strategist for First Trust, said in a note.
Top current holdings include U.S. Treasury note 1.875% due 01/31/2022 20.9%, U.S Treasury Note 1.125% due 01/31/2019 14.9%, U.S. Treasury note 2% due 11/15/2016 8.94%, U.S. Treasury bond 2.875% due 11/15/2046 6.77% and Fannie Mae 3.5% due 02/01/2044 5.3%
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