The index ranks companies in the S&P 500 based on their FCF yield within their respective GICS sectors. It then selects those companies ranking within the top 20% of FCF yield from each GICS sector. The index provider then excludes companies with the lowest non-positive FCF yield.
A Growing Suite of ETFs
The launch of FCFY follows First Trust listing two active intermediate fixed income ETFs on the New York Stock Exchange. The First Trust Intermediate Duration Investment Grade Corporate ETF (FIIG) invests in investment grade corporate debt. Meanwhile, the First Trust Intermediate Government Opportunities ETF (MGOV) targets U.S. government debt.
First Trust has been expanding its overall suite of ETFs this year. In March, First Trust launched the First Trust Bloomberg Inflation Sensitive Equity ETF (FTIF). FTIF targets U.S. exchange-listed companies within sectors expected to benefit from rising prices. It also launched in March the First Trust Bloomberg Emerging Market Democracies ETF (EMDM), which seeks companies in emerging markets where political rights and civil liberties are highly regarded.
In February, First Trust listed the actively managed First Trust Multi-Strategy Alternative ETF (LALT). LALT gains exposure to alternatives by investing in exchange traded products backed by physical commodities or currencies.
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