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Active ETFs Help Drive First Trust’s Growth


First Trust is the sixth-largest U.S. issuer of exchange traded funds and the Illinois-based firm’s growth trajectory has not gone unnoticed.

The firm had $33.2 billion in ETF assets under management as of Dec. 22, up from $27.8 billion at the end of the second quarter. At the end of the last year, First Trust was “just” the ninth-largest ETF issuer with “just” $19.7 billion in assets. [AlphaDEX ETFs Drive First Trust Growth]

Industry observers know a major catalyst for First Trust’s growth has been the movement toward smart beta ETFs, one that benefits the firm and its expansive lineup of AlphaDEX ETFs. AlphaDEX funds are based “on growth factors including three, six and 12-month price appreciation, sales to price and one year sales growth, and, separately, on value factors including book value to price, cash flow to price and return on assets,” according to First Trust.

As of late August, assets under managements across smart beta ETFs totaled $350 billion, a 30% year-over-year increase, and that is good news for First Trust. [U.S. ETFs Hit $2 Trillion in Assets]

However, the company is a also a leading player in the growing actively managed ETF market.

“First Trust grew its (actively managed ETF) market share by 5% and beat out 22 other active ETF sponsors in net flow for November. Pimco had $6.65 billion in active ETF assets at the end of November, or 36% of the industry total. First Trust, with $3.3 billion, had 18%,” reports Aparna Narayanan for Investor’s Business Daily, citing AdvisorShares data.

First Trust now offers 14 actively managed ETFs, several of which have been important drivers of the firm’s growth in the actively managed arena.

The First Trust North American Energy Infrastructure Fund (EMLP) , 2014’s top performing energy ETF, is a prime example. EMLP has added $413 million in new assets this year and with $971.3 million in assets under management, EMLP is one of the largest actively managed ETFs in the U.S. [Meet This Year's Top Energy ETF]

The First Trust Enhanced Short Maturity Fund (FTSM) is another actively managed success story for First Trust. FTSM launched in early August and saw its AUM total swell to over $1.6 billion by mid-November. Although the ETF now has $798 million in AUM, it is still one of the most successful ETFs to come to market this year.

Other successful actively managed ETFs from First Trust include the First Trust Senior Loan ETF (FTSL) and the First Trust Preferred Securities and Income ETF (FPE) . F PE debuted in February 2013 and has $104.1 million in assets while FTSL launched in May 2013 and now has almost $212 million in assets.

For the week ending Dec. 12, First Trust had $2.44 billion in actively managed ETF assets under management across 14 funds, according to AdvisorShares data.

First Trust Enhanced Short Maturity Fund Top Holdings


ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.