An actively managed ETF that targets emerging opportunities across areas of innovationMay 26, 2021 09:28 AM Eastern Daylight Time
WHEATON, Ill.–(BUSINESS WIRE)–First Trust Advisors L.P. (“First Trust”) a leading exchange-traded fund (“ETF”) provider and asset manager, announced today that it has launched the First Trust Innovation Leaders ETF (NYSE Arca: ILDR) (“the fund”). The fund seeks to provide capital appreciation by investing at least 80% of its net assets (plus any borrowings for investment purposes) in the common stocks of U.S. and non-U.S. companies that may benefit from the development or application of scientific and technological innovation.“Thematic ETFs have exploded in popularity over the past year as investment professionals have sought tools to capture cutting‐edge trends from a range of industries.”
Rapid scientific and technological change is currently being applied to areas of innovation that First Trust considers to be fertile ground for seeking investment opportunities brought about by change. ILDR aims to outperform the broader markets by having outsized exposure to themes that are growing faster than the underlying economy. The fund invests in dominant companies that tend to be pioneers who may capitalize on disruptive innovation by developing technologies that have the potential to displace older technologies or create new markets.
“Thematic ETFs have exploded in popularity over the past year as investment professionals have sought tools to capture cutting‐edge trends from a range of industries,” said Ryan Issakainen, CFA, Senior Vice President, ETF Strategist at First Trust. “As a leader in thematic investing, we believe this actively managed ETF represents our expertise in identifying the most compelling opportunities that may lie among multiple themes.”
The fund is managed by First Trust Advisors L.P., with selection and portfolio decisions made by a team of portfolio managers. The securities included in the portfolio are chosen using a disciplined approach, leveraging the knowledge of First Trust’s equity research and portfolio management teams who understand the drivers of risk-adjusted returns. The fund combines both a top-down theme identification process and bottom-up stock selection process to identify companies that are seeking solutions to the technological, industrial and health problems of our age. This includes, but is not limited to, companies that we believe are poised to benefit from the development of new products or services, technological improvements and/or advancements in scientific research related to automation, advanced medicine, networks, advanced computing, enhanced mobility, energy revolution and e-commerce.
For more information about First Trust, please contact Ryan Issakainen at (630) 765-8689 or RIssakainen@FTAdvisors.com.
About First Trust
First Trust is a federally registered investment advisor and serves as the fund’s investment advisor. First Trust and its affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately held companies that provide a variety of investment services. First Trust has collective assets under management or supervision of approximately $194 billion as of April 30, 2021 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts. First Trust is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. First Trust and FTP are based in Wheaton, Illinois. For more information, visit http://www.ftportfolios.com.
You should consider the fund’s investment objectives, risks, and charges and expenses carefully before investing. Contact First Trust Portfolios L.P. at 1-800-621-1675 or visit www.ftportfolios.com to obtain a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.
A fund’s shares will change in value, and you could lose money by investing in a fund. One of the principal risks of investing in a fund is market risk. Market risk is the risk that a particular stock owned by a fund, fund shares or stocks in general may fall in value. Some of the securities held by the fund may be illiquid. There can be no assurance that a fund’s investment objective will be achieved. The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of this COVID-19 pandemic may last for an extended period of time and will continue to impact the economy for the foreseeable future. In managing the fund’s investment portfolio, the portfolio managers will apply investment techniques and risk analyses that may not have the desired result.
Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Market prices may differ to some degree from the net asset value of the shares. Investors who sell fund shares may receive less than the share’s net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, unlike mutual funds, shares may only be redeemed directly from the fund by authorized participants, in very large creation/redemption units. If the fund’s authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a discount to the fund’s net asset value and possibly face delisting.
To the extent the fund has significant exposure to a single asset class, industry, or sector, it may be more affected by an adverse economic or political development than a broadly diversified fund. Small- and mid-capitalization companies may experience greater price volatility than larger, more established companies. The fund invests in companies believed to offer exposure to emerging opportunities across areas of innovation. However, companies believed to be capitalizing on these opportunities may not do so. The fund may invest in a company that does not currently derive any revenue from disruptive innovations or technologies, and there is no assurance that a company will derive any revenue from disruptive innovations or technologies in the future. A disruptive innovation or technology may constitute a small portion of a company’s overall business. As a result, the success of a disruptive innovation or technology may not affect the value of the equity securities issued by the company.
Securities of non-U.S. issuers are subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers. Depositary receipts may be less liquid than the underlying shares in their primary trading market.
As the use of Internet technology has become more prevalent in the course of business, the fund has become more susceptible to potential operational risks through breaches in cyber security.
The fund is classified as “non-diversified” and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.
The fund may be a constituent of one or more indices or models which could greatly affect the fund’s trading activity, size and volatility.
Large capitalization companies may grow at a slower rate than the overall market.
The fund’s advisor may seek to reduce various operational risks through controls and procedures, but it is not possible to completely protect against such risks.
High portfolio turnover may result in higher levels of transaction costs and may generate greater tax liabilities for shareholders.
Trading on the exchange may be halted due to market conditions or other reasons. There can be no assurance that the requirements to maintain the listing of the fund on the exchange will continue to be met or be unchanged.
Large inflows and outflows may impact a new fund’s market exposure for limited periods of time.
First Trust Advisors L.P. is the adviser to the fund. First Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P., the fund’s distributor.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Source: First Trust Advisors L.P.