First Trust Launches Emerging Market Debt ETF, 'EFIX' | ETF Trends

First Trust Advisors L.P., a leading exchange-traded fund provider and asset manager, announced on Thursday that it has launched a new actively managed ETF, the First Trust TCW Emerging Market Debt ETF (NYSE Arca: EFIX). The fund seeks to provide a high total return from current income and capital appreciation by investing in emerging market debt. The portfolio is sub-advised and managed by TCW Investment Management Company LLC.

“We believe professional management for fixed income assets is more important than ever. This actively managed ETF provides another tool for investment advisors seeking to capitalize on opportunities in emerging markets fixed income by leveraging the best thinking of the world-class team at TCW,” said Ryan Issakainen, CFA, Senior Vice President, ETF Strategist at First Trust.

TCW believes emerging market fixed income is an important and growing segment of the global economy. “In this portfolio, TCW takes a total return approach, investing across hard currency emerging market sovereigns and corporates. We seek to capture inflection points—whether driven by structural reforms, political change, or improving growth dynamics—in an effort to capture the greatest risk/reward for the benefit of our investors,” said Alex Stanojevic, TCW, Group Managing Director, Portfolio Manager.

“Furthermore, in many cases, debt to GDP ratios in emerging market countries are lower than in the developed world, and with over 65% of debt globally yielding below 2%, according to Standard Chartered as of January 29, 2021, emerging markets debt represents an attractive carry opportunity within fixed income,” said David I. Robbins, TCW, Group Managing Director, Portfolio Manager.

EFIX invests in debt securities issued or guaranteed by companies, financial institutions, and government entities located in emerging market countries. These investments include, but are not limited to, sovereign entities, quasi-sovereign entities, and corporations. TCW’s fixed income management philosophy applies a long-term value discipline emphasizing fundamental research, with a strong emphasis on risk and liquidity management. Their top-down/bottom-up research is used to drive the portfolio’s country allocation and security selection decisions.

In addition to Alex Stanojevic and David Robbins, the fund’s portfolio management team from TCW includes Penelope D. Foley, TCW, Group Managing Director, Portfolio Manager. The portfolio managers are jointly responsible for the day-to-day management of the fund.

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