First Trust launched a new actively managed municipal bond ETF to help investors access more attractive income opportunities.
First Trust Advisors rolled out the active First Trust Municipal High Income ETF (NasdaqGM: FMHI), which has a 0.55% expense ratio.
Tom Futrell, Senior Vice President and Portfolio Manager of First Trust, and Johnathan N. Wilhelm, Senior Vice President and Portfolio Manager of First Trust, will both serve as portfolio managers for the new fund.
“We believe federal and state tax increases implemented in recent years, coupled with favorable historical risk-adjusted total returns, have boosted the demand for tax exempt investments. At the same time, some municipalities have faced increasing economic challenges, which we believe has raised the importance of active credit analysis and municipal bond expertise. Unlike index-based ETFs that may simply rely on rating agencies for credit analysis, we believe it is critical to understand an issuer’s ability to meet its financial obligations. Active portfolio management allows the fund managers to make portfolio adjustments as conditions change,” Ryan Issakainen, Senior Vice President, ETF Strategist at First Trust, said in a note.