FDIV Profile
The First Trust Strategic Income ETF is a multi-manager, multi-strategy, actively managed exchange-traded fund (ETF) that seeks to deliver a diversified income stream by investing across a variety of asset classes. The fund is designed to provide investors with exposure to a broad range of income-generating investments, utilizing the expertise of multiple portfolio managers to navigate different market conditions. This approach allows the fund to adjust its allocations dynamically in response to changing economic and market environments, aiming to optimize returns while managing risk.
The ETF's investment strategy is diversified across several key categories, each chosen for its income potential and contribution to the overall portfolio’s risk profile. These categories include high-yield corporate bonds and first lien senior secured floating rate bank loans, which offer attractive yields in exchange for higher credit risk. Mortgage-related investments are also a significant component, providing exposure to the real estate market and benefiting from the stability of income streams backed by property assets. Preferred securities are included for their hybrid characteristics, offering both fixed-income and equity-like features, making them a valuable addition to the income-focused strategy.
In addition to domestic investments, the First Trust Strategic Income ETF also allocates a portion of its assets to international sovereign bonds, which provide geographic diversification and exposure to global interest rate trends. The fund’s equity exposure includes investments in Energy Infrastructure Companies, with a particular focus on master limited partnerships (MLPs), which are known for their high dividend yields. Furthermore, the fund invests in dividend-paying U.S. exchange-traded equity securities and depositary receipts, which contribute to the fund’s income generation while offering the potential for capital appreciation.
This ETF is particularly suited for investors seeking a diversified approach to income generation, with the flexibility to adapt to various market conditions. The multi-strategy, multi-manager structure provides a robust framework for managing risk while pursuing higher yields across different asset classes. It is an ideal choice for income-focused investors who are looking for a combination of fixed income and equity exposure, both domestically and internationally, and who are willing to benefit from the expertise of multiple portfolio managers to achieve their financial goals.
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