First Trust Portfolios will continue to focus its product development efforts on exchange-traded funds that use alternative weighting strategies and, to a lesser extent, actively managed ETFs. The firm is gearing up to expand its lineup of AlphaDEX funds by launching seven country-specific funds and two small-cap funds on Feb. 15, Ryan Issakainen, senior v.p. and ETF strategist, told FII. It also plans to launch in the second quarter its first actively managed ETF, the First Trust North American Energy Infrastructure Fund.
First Trust is among a growing number of firms bringing to market ETFs that track indices that use alternatives to the traditional market-cap weighting, noted Michael Jabara, v.p. and head of ETF and closed-end fund research at Morgan Stanley Smith Barney. The shift in product development to these hybrid ETFs has sparked an industry-wide debate about the efficacy of these strategies (FII, 1/25). These funds’ quarterly rebalancing can result in more turnover, but as a result, they give investors the precise exposure....