HSMV Profile
The First Trust Horizon Managed Volatility Small/Mid ETF is an actively-managed exchange-traded fund designed to provide exposure to small- and mid-cap U.S. companies with a focus on minimizing volatility. The fund aims to invest at least 80% of its net assets, including any borrowings for investment purposes, in common stocks of small- and mid-cap companies listed on U.S. national securities exchanges. The selection process is guided by the Sub-Advisors’ objective to identify equities expected to exhibit lower future volatility compared to their peers.
The ETF employs a managed volatility strategy that emphasizes the identification and investment in stocks with relatively stable price movements, aiming to reduce the overall risk and enhance the stability of returns. The fund’s investment strategy involves a detailed analysis of historical price volatility and other financial metrics to select stocks that are anticipated to experience less price fluctuation. This approach helps in managing risk and achieving more predictable performance over time.
The fund is characterized by its non-diversified nature, which means it concentrates its investments in a narrower range of securities. This focused strategy allows the ETF to maintain a concentrated exposure to selected small- and mid-cap stocks, which could potentially enhance returns but also introduces sector-specific risks. The non-diversified approach aligns with the fund’s objective to manage volatility and provide a stable investment profile.
Managed by First Trust Advisors L.P., the First Trust Horizon Managed Volatility Small/Mid ETF reflects the firm's expertise in creating investment solutions that balance risk and return. The fund’s strategy is rooted in advanced quantitative methods and volatility management techniques, aimed at offering investors a robust tool for exposure to smaller-cap U.S. equities while mitigating excessive price swings. Through its targeted investment approach and focus on low-volatility stocks, the ETF provides a unique opportunity for investors seeking stability in the small- and mid-cap equity space.
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