First Trust launches First Trust Low Duration Strategic Focus ETF

By Sarah Lizee

Olympia, Wash., Jan. 4 – First Trust Advisors LP launched the First Trust Low Duration Strategic Focus ETF, according to a press release.

The fund seeks to generate current income with a secondary objective of preservation of capital.

FirstTrust said the fund seeks to achieve these objectives by allocating primarily among First Trust ETFs, but may also include other ETFs representing various asset classes, aimed at providing diversification benefits and less interest rate sensitivity when compared to traditional core fixed income benchmarks over time.

The fund is managed by First Trust Advisors LP.

The firm said the investment committee seeks to construct a portfolio with a target duration of three years or less, while managing both interest rate risk and credit risk.

The fund focuses on lower duration securities as they have historically held up better in rising interest rate environments than those with longer durations, First Trust said.

“At this point in the cycle, we believe risk management is critical for fixed income investors,” Ryan Issakainen, senior vice president, ETF strategist at First Trust, said in the release.

“This ETF harnesses the best of First Trust’s intellectual capital to provide investment advisors with an efficient tool to help manage their clients’ fixed income needs.”

Wheaton, Ill.-based First Trust provides investment services, including asset management and financial advisory services.

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