First Trust Launches International Multi-Asset Diversified Income Index Fund
First Trust Launches International Multi-Asset Diversified Income Index Fund
New Exchange-Traded Fund Seeking Income and Diversification Using a Multi-Asset Approach
WHEATON, Ill.--(BUSINESS WIRE)-- First Trust Advisors L.P. ("First Trust"), a provider of more than 200 investment products, announced the launch of the International Multi-Asset Diversified Income Index Fund , an exchange-traded fund (ETF) which is expected to begin trading on NASDAQ on August 23, 2013.
The International Multi-Asset Diversified Income Index Fund ("the Fund") seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of the NASDAQ International Multi-Asset Diversified Income IndexSM. The Fund provides international exposure to a diversified mix of asset classes in a single investment portfolio that has built-in volatility screens. Yield is the main driver behind the index; however, within each asset class a maximum volatility cap is used that seeks to limit securities that have high yields strictly due to poor price performance. The portfolio is further diversified within each asset class. As a result, the Fund provides the potential for a lower-risk total return alternative to investing solely in one asset class. Since income is generated from multiple sources, the Fund may provide less interest-rate sensitivity than traditional fixed-income securities. It is important to note that diversification does not guarantee profit or protect against loss.
The index is comprised of international dividend-paying stocks, international real estate investment trusts (REITs), non-U.S. infrastructure companies, non-U.S. preferred securities and an ETF that invests in non-U.S. debt instruments. Every asset class has its own set of eligibility criteria, and every security in the index is non-U.S.-listed and meets stringent eligibility criteria based on liquidity, size, volatility and yield. The index is rebalanced in every quarter.
"The Fund will seek to deliver a relatively high level of income for investors, while also providing diversification benefits to traditional fixed income portfolios," said Ryan Issakainen, Senior Vice President and ETF Strategist at First Trust. "This diversified approach, with built-in rebalancing, may also help income-seeking investors maintain discipline during periods of volatility."
For more information about First Trust, please contact Chris Moon of JCPR at 973-850-7304 or firstname.lastname@example.org.
About First Trust
First Trust Advisors L.P., along with its affiliate First Trust Portfolios L.P., are privately-held companies which provide a variety of investment services, including asset management and financial advisory services, with collective assets under management or supervision of approximately $73 billion as of July 31, 2013 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts. First Trust is 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 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.
The Fund lists and principally trades its shares on The NASDAQ Stock Market LLC.
The Fund's return may not match the return of the NASDAQ International Multi-Asset Diversified Income IndexSM. The Fund may not be fully invested at times. Securities held by the Fund will generally not be bought or sold in response to market fluctuations.
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.
The Fund's shares will change in value, and you could lose money by investing in the fund. One of the principal risks of investing in the Fund is market risk. Market risk is the risk that a particular security owned by the Fund, Fund shares or securities in general may fall in value.
REITs are subject to certain risks, including changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession.
Infrastructure companies are subject to certain risks, including price and supply fluctuations caused by international politics, energy conservation, taxes, price controls, and other regulatory policies of various governments.
Preferred securities combine some of the characteristics of both common stocks and bonds. Preferred securities are typically subordinated to bonds and other debt instruments in a company's capital structure, in terms of priority to corporate income, and therefore will be subject to greater credit risk than those debt instruments. Preferred securities are also subject to credit risk, interest rate risk and income risk.
The Fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.
Because the Fund invests in exchange-traded funds that invest in fixed income securities, it is subject to additional risks pertaining to interest rates and credit risk. Credit risk may be heightened if the Fund invests in "high yield" or "junk" debt; such securities, while generally offering higher yields than investment grade debt with similar maturities, involve greater risks, including the possibility of dividend or interest deferral, default or bankruptcy, and are regarded as predominantly speculative with respect to the issuer's capacity to pay dividends or interest and repay principal.
An investment in a fund containing equity securities of foreign issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting foreign issuers. These risks may be heightened for securities of companies located in, or with significant operations in, emerging market countries. Because the Fund's NAV is determined on the basis of U.S. dollars and the Fund invests in foreign securities, you may lose money if the local currency of a foreign market depreciates against the U.S. dollar. Additionally, the Fund invests in depositary receipts which may be less liquid than the underlying shares in their primary trading market.
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.
Nasdaq®, OMX®, Nasdaq OMX® and NASDAQ International Multi-Asset Diversified Income Index℠ are registered trademarks and service marks of The NASDAQ OMX Group, Inc. (which with its affiliates is referred to as the "Corporations") and are licensed for use by First Trust Advisors L.P. The fund has not been passed on by the Corporations as to its legality or suitability. The fund is not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.
KEYWORDS: United States North America Illinois
The article First Trust Launches International Multi-Asset Diversified Income Index Fund originally appeared on Fool.com.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.