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First Trust Rolls Out Global Multi-Asset ETF


Nearly a year after it introduced the popular First Trust Multi-Asset Diversified Income Index Fund (MDIV) , First Trust will roll out MDIV’s international counterpart today with the debut of the First Trust International Multi-Asset Diversified Income Index Fund (NasdaqGS: YDIV).

YDIV, which will charge 0.79% per year, will track the NASDAQ International Multi-Asset Diversified Income Index. Like MDIV, which has raked in $482.8 million in assets since coming to market last August, YDIV will hold master limited partnerships (MLPs), preferred stocks and real estate investment trusts (REITs). [ High Yield Dividend ETFs off the Beaten Path]

YDIV will also invest in dividend stocks, non-U.S. infrastructure firms and a non-U.S. junk bond ETF. Dividend equities comprise a quarter of the index while REITs, infrastructure companies and preferred stocks each account for 20% with the bond ETF getting an allocation of 15%, according to ETF Daily News.

Dividend stocks and MLPs combine for nearly 48% of MDIV’s weight, all a junk bond ETF is the fund’s largest individual holding at 15.5%. No other holding has a weight of more than 1.42%.

The concept of an international mutli-asset ETF is not new as YDIV will compete directly with the six-year old Guggenheim International Multi-Asset Income ETF (HGI). HGI has an annual expense ratio of 0.7% and $114.3 million in assets.

HGI invests in “international companies, global REITs, master limited partnerships, Canadian royalty trusts, American depositary receipts of emerging market companies and U.S. listed closed-end funds that invest in international companies,” according to Guggenheim.

Multi-asset “funds are typically designed to be truly tactical in nature, having the ability to shift assets into equities, fixed income, and even alternative investments depending on market views, momentum factors, and such,” said Paul Weisbruch of Street One Financial. [Multi-Asset ETFs Building Track Records]

Weibruch notes there are 20 multi-asset ETFs on the market today. The Guggenheim Multi-Asset Income ETF (CVY) is one of the oldest and more successful at nearly seven years old with over $1.1 billion in assets.

First Trust Multi-Asset Diversified Income Index Fund

ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of CVY.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.