FTSM, by First Trust, seeks to achieve its investment objective under normal market conditions by focusing on U.S. dollar-denominated fixed- and variable-rate debt securities, including a diverse range of instruments such as those issued or guaranteed by the U.S. government, mortgage-backed securities, corporate bonds, and various other debt securities. The fund also incorporates money market securities into its investment strategy. Employing a meticulous approach, the fund's investment advisor selects securities based on thorough evaluations of fixed-income sectors and macro market trends, supplemented by bottom-up analysis of individual securities. Key considerations include credit quality, yield, interest rate sensitivity, and liquidity. The fund maintains a disciplined approach to monitoring its holdings, with securities being sold when better relative value is identified, or when adjustments are needed to maintain diversification. With a focus on investment-grade securities, the fund's investment advisor assesses the quality of unrated securities through fundamental credit analysis. Notably, the portfolio maintains an average duration of less than one year and an average maturity of less than three years, with careful attention paid to the calculation methodologies for different types of debt securities. Additionally, the fund may allocate a portion of its assets to asset-backed securities, mortgage-related securities, and floating-rate loans, with a limit on investments in privately-issued mortgage- and asset-backed securities. Furthermore, the fund may invest in investment companies, including ETFs, to bolster its exposure to debt securities while also considering restricted securities within its investment scope.
FTSM Dividend, as an investment product, aims to deliver on its objective by primarily investing in dividend-paying equity securities. Under typical market conditions, the fund intends to allocate at least 80% of its assets in a portfolio of stocks that offer dividends. These equities may encompass a variety of sectors and industries, providing diversification to the fund's holdings. The investment strategy is grounded in rigorous analysis, where the fund's management evaluates individual companies' financial health, dividend history, growth prospects, and overall market trends. This meticulous approach guides the selection process, ensuring that the fund invests in companies with sustainable dividend policies and potential for long-term growth. Additionally, FTSM Dividend may also hold a portion of its assets in other dividend-paying securities, such as real estate investment trusts (REITs) or dividend-paying exchange-traded funds (ETFs), further enhancing income generation potential. Overall, FTSM Dividend seeks to provide investors with a steady stream of income through dividends while aiming for capital appreciation over time.
FTSM Tracking is designed to closely mirror the performance of a specific benchmark index, typically through investments in a diversified portfolio of securities that represent the index constituents. With an aim to track the index as closely as possible, the fund allocates its assets across a range of assets that mimic the index composition, including stocks, bonds, or other financial instruments. Under normal market conditions, FTSM Tracking maintains a high level of correlation with its benchmark, striving to replicate its returns net of fees. The fund's management employs sophisticated tracking strategies, including optimization techniques and periodic rebalancing, to minimize tracking error and ensure alignment with the benchmark's performance. Additionally, FTSM Tracking may utilize derivative instruments or engage in securities lending activities to further enhance its ability to replicate the index returns. By providing investors with a cost-effective and efficient way to gain exposure to a specific market segment or asset class, FTSM Tracking serves as a valuable tool for those seeking to achieve market-like returns with minimal deviation from the benchmark.
FTSM Correlation is a specialized investment vehicle aimed at leveraging statistical relationships between different asset classes to optimize portfolio diversification and risk management. This fund strategically allocates its assets across a diverse range of securities, including stocks, bonds, commodities, and alternative investments, with the goal of constructing a portfolio that exhibits low correlation to traditional market indices. By systematically analyzing historical data and employing advanced quantitative models, FTSM Correlation identifies assets that demonstrate low or negative correlation to each other, thus potentially reducing overall portfolio volatility and enhancing risk-adjusted returns. The fund's investment approach emphasizes dynamic asset allocation, allowing for adjustments in response to changing market conditions and correlations among asset classes. Through its innovative strategy, FTSM Correlation aims to provide investors with a unique opportunity to diversify their portfolios and potentially mitigate downside risk while seeking to achieve attractive long-term returns.
FTSM Sector focuses on capturing opportunities within specific sectors of the economy by investing in companies that operate within those industries. With a targeted approach, the fund seeks to outperform broader market indices by strategically allocating its assets to sectors poised for growth or exhibiting strong fundamentals. Through in-depth research and analysis, FTSM Sector's management identifies promising sectors and selects individual stocks within those sectors that demonstrate potential for superior performance. This investment strategy allows the fund to capitalize on sector-specific trends, market dynamics, and business cycles. By concentrating its investments in select sectors, FTSM Sector offers investors the potential for enhanced returns while also providing exposure to targeted segments of the economy. However, it's important to note that this focused approach may also introduce higher levels of volatility compared to more diversified funds.
FTSM Exposure provides investors with a strategic means to gain exposure to specific asset classes, regions, or investment themes. This fund aims to tailor its investment portfolio to target desired exposures, whether it's to emerging markets, certain industries, or asset classes like commodities or real estate. By utilizing a combination of direct investments, derivatives, and other financial instruments, FTSM Exposure seeks to replicate the performance of its chosen exposure effectively. The fund's management conducts thorough research and analysis to identify opportunities and risks associated with the selected exposure, adjusting the portfolio as needed to optimize returns while managing risk. FTSM Exposure offers investors a flexible and efficient way to access targeted investment opportunities, allowing them to customize their portfolios according to their investment objectives and views on specific market segments.
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