MMSC Profile
First Trust Multi-Manager Small Cap Opportunities ETF seeks to provide investors with exposure to small capitalization equities through a diversified, multi-manager approach. Under normal market conditions, the fund invests at least 80% of its net assets in equity securities issued by small-cap companies. These companies are defined by the fund's adviser as those with market capitalizations within the range of the Russell 2000 Growth Index, which represents small-cap growth stocks in the U.S. market.
The fund employs a multi-manager strategy, integrating the expertise of various portfolio management teams to enhance its investment approach. Each manager is tasked with selecting securities based on their belief that earnings growth is a key driver of stock performance. By blending multiple managers' perspectives and strategies, the fund aims to capture a wide array of opportunities within the small-cap segment, potentially leading to higher returns while managing the inherent risks of smaller, growth-oriented companies.
As a non-diversified fund, First Trust Multi-Manager Small Cap Opportunities ETF may concentrate its investments in fewer securities or sectors compared to more diversified funds. This concentration can amplify both potential returns and risks. The multi-manager structure helps mitigate some of this risk by leveraging the varied expertise and investment strategies of different managers, thus offering a more balanced approach to investing in small-cap stocks.
The focus on small-cap companies provides investors with access to a segment of the market that is often characterized by higher growth potential and volatility. The integration of diverse management teams allows the fund to utilize a broad range of investment insights and methodologies, aiming to identify promising small-cap opportunities. This strategy aligns with the funds objective of delivering strong growth performance through a comprehensive and dynamic investment approach tailored to the small-cap market.
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