6 min readBy Ron Koren ETF Insider
How does the CEFA ETF work?
The CEFA ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The First Trust Advisors L.P. (FDNI) issuer operates with a commitment to replicating the performance of its designated index, investing at least 90% of its net assets in securities comprising the Index. Developed, maintained, and sponsored by S&P Dow Jones Indices LLC, the Index is meticulously crafted to assess the performance of non-U.S. issuers primarily engaged in Internet-related businesses. This includes companies involved in Internet commerce or Internet services, selected from the S&P Global ex-U.S. Broad Market Index. The Index's criteria involve deriving a majority of revenue from Internet commerce or services, excluding companies not meeting size and liquidity requirements. Notably, Indian companies must be listed on developed market exchanges to be eligible. The composition of the Index is adjusted quarterly based on market capitalization, with a maximum 10% cap on individual securities' weight. The FDNI employs a strategy of investing in non-Chinese shell companies to access Chinese firms included in the Index, not directly accessible to foreign investors. While subject to quarterly reconstitution and rebalancing, the Fund's concentrated investments, as of December 31, 2023, span communication services, consumer discretionary, and significant exposure to Chinese and Asian issuers, with potential shifts over time. As a non-diversified fund under the Investment Company Act of 1940, the FDNI entails exposure to risks associated with concentrated investments in specific jurisdictions or sectors.
The FDNI Dividend aims to provide investors with a steady income stream by investing in securities that exhibit strong dividend characteristics. Managed by First Trust Advisors L.P., the fund typically allocates at least 90% of its net assets to securities comprising its designated index. Developed by S&P Dow Jones Indices LLC, the index focuses on non-U.S. issuers primarily involved in Internet-related businesses, with specific criteria for inclusion based on revenue derived from Internet commerce or services. The FDNI Dividend, through its indexing investment approach, seeks to replicate the performance of the index before fees and expenses. With quarterly reconstitution and rebalancing, the fund's strategy includes investing in companies with substantial dividend potential while also adhering to size, liquidity, and sector-specific requirements outlined by the index methodology. By providing exposure to dividend-paying securities within the Internet-related sector, the FDNI Dividend offers investors the opportunity to participate in potential income generation alongside the growth potential of this dynamic market segment.
The FDNI Tracking fund, managed by First Trust Advisors L.P., is designed to closely mirror the performance of its designated index, employing an indexing investment strategy. With a commitment to tracking the index before fees and expenses, the fund typically invests at least 90% of its net assets in securities comprising the index. Developed and maintained by S&P Dow Jones Indices LLC, the index focuses on non-U.S. issuers primarily involved in Internet-related businesses, applying specific criteria for inclusion based on revenue generated from Internet commerce or services. The FDNI Tracking fund meticulously follows the index's composition, which includes both Internet commerce and Internet services companies from developed and emerging markets. With quarterly reconstitution and rebalancing, the fund ensures alignment with changes in the index's constituents and maintains a high level of accuracy in tracking its performance. By providing investors with a transparent and efficient way to gain exposure to the Internet-related sector, the FDNI Tracking fund offers a reliable vehicle for capturing the potential growth opportunities within this dynamic market segment.
The FDNI Correlation fund, overseen by First Trust Advisors L.P., focuses on maintaining a strong correlation with its designated index, employing a meticulous approach to investment management. With a core objective of closely tracking the performance of the index before fees and expenses, the fund typically allocates at least 90% of its net assets to securities comprising the index. Developed and managed by S&P Dow Jones Indices LLC, the index is specifically tailored to reflect the performance of non-U.S. issuers primarily engaged in Internet-related businesses, with stringent criteria for inclusion based on revenue derived from Internet commerce or services. The FDNI Correlation fund ensures that its investment decisions align closely with the composition and weighting of the index, striving to minimize tracking error and maintain a high degree of correlation over time. Through diligent portfolio management and adherence to the index methodology, the fund aims to provide investors with a reliable means of capturing the returns of the Internet-related sector while managing correlation risk effectively.
The FDNI Sector fund, managed by First Trust Advisors L.P., offers investors exposure to specific sectors within the non-U.S. Internet-related market. With a primary goal of targeting sectors exhibiting strong growth potential, the fund strategically allocates its investments to companies involved in Internet commerce or services, adhering to the criteria outlined by the designated index. Developed and maintained by S&P Dow Jones Indices LLC, this index selects securities from the S&P Global ex-U.S. Broad Market Index, focusing on companies deriving a majority of their revenue from Internet-related activities. The FDNI Sector fund's investment strategy involves thorough sector analysis and selection, ensuring a diversified portfolio within the Internet-related space while targeting sectors poised for growth. By providing investors with exposure to specific sectors within the global Internet market, the FDNI Sector fund offers a focused approach to capturing potential opportunities in this dynamic and rapidly evolving industry.
The FDNI Exposure fund, managed by First Trust Advisors L.P., offers investors a comprehensive exposure to the non-U.S. Internet-related market. With a strategic focus on replicating the performance of its designated index, the fund typically invests at least 90% of its net assets in securities comprising the index. Developed and maintained by S&P Dow Jones Indices LLC, the index is meticulously designed to reflect the performance of non-U.S. issuers primarily engaged in Internet-related businesses. Through its indexing investment approach, the FDNI Exposure fund aims to provide investors with broad exposure to companies involved in Internet commerce or services, spanning developed and emerging markets. By capturing the growth potential of the global Internet sector, the fund offers investors a convenient and efficient way to gain exposure to this dynamic market segment, while minimizing the complexities associated with individual security selection.
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6 min readThe CEFA ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
5 min readThe FDNI ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
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