First Trust Expands its Actively Managed Lineup with the Launch of FT Raymond James Multicap Growth Equity ETF

Rhea-AI Summary

First Trust Advisors L.P. has launched a new actively managed ETF, the FT Raymond James Multicap Growth Equity ETF (NYSE Arca: RJMG), seeking long-term capital appreciation. The ETF invests in U.S.-listed equity securities with growth characteristics rated 'Strong Buy' or 'Outperform' by Raymond James Equity Research. The fund's model portfolio is developed and overseen by Raymond James, providing investors exposure to their highest conviction ideas.

Insights

Financial Analyst

The launch of the FT Raymond James Multicap Growth Equity ETF (RJMG) by First Trust represents a strategic move in the asset management industry, particularly in the realm of actively managed ETFs. This fund's approach, focusing on a multicap strategy that aims to capitalize on growth characteristics, is designed to appeal to investors who are seeking alternatives to passive, index-tracking investments. Given the fund's active management and reliance on Raymond James' equity research, the potential for outperformance relative to market indices like the S&P 500 could attract investors looking for higher returns, albeit with potentially higher risk.

The selection of stocks rated as 'Strong Buy' or 'Outperform' suggests a research-intensive approach that may benefit from market inefficiencies. However, it is important to note that active management often comes with higher fees compared to passive strategies, which can erode net returns. Investors will need to weigh the potential for outperformance against the cost of active management. Additionally, the fund's performance will be closely tied to the effectiveness of Raymond James' stock selection process and the broader market conditions that may affect growth stocks.

Market Research Analyst

From a market perspective, the timing of RJMG's launch is noteworthy. With the recent volatility in the stock market and the ongoing debate over the value of active versus passive investment strategies, a new actively managed ETF could be seen as a timely offering for investors reevaluating their portfolios. The shift towards active management indicated by First Trust's statement suggests a belief in the potential for stock pickers to navigate a potentially more complex market environment ahead.

Market capitalization diversity within the fund's portfolio is another aspect that could appeal to investors, as it offers exposure across various segments of the market, potentially providing a more balanced risk-return profile. However, the fund's success will depend on market reception and its ability to consistently deliver on its growth promise. The multicap growth strategy must demonstrate its ability to adapt to changing market conditions and to maintain performance across market cycles to justify its place in investors' portfolios.

Investment Strategist

Strategically, the FT Raymond James Multicap Growth Equity ETF's active management approach is positioned to leverage Raymond James' analytical strengths in stock selection. This could offer a distinct advantage during periods when market trends are less predictable and where a passive approach might not capture emerging opportunities. The fund's focus on high conviction ideas reflects a targeted investment philosophy that could resonate with investors who prefer a more hands-on approach to portfolio construction.

Long-term capital appreciation remains a fundamental goal for many investors and the fund's strategy aligns with this objective. However, the inherent risks associated with growth investing, such as higher volatility and the potential for significant drawdowns during market downturns, must be considered. Investors will need to assess the fund's strategy against their individual risk tolerance and investment horizon. The fund's performance track record, once established, will be crucial for evaluating its efficacy as a growth-oriented investment vehicle.

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 a new actively managed ETF that seeks to provide long-term capital appreciation, the FT Raymond James Multicap Growth Equity ETF (NYSE Arca: RJMG) (“the fund”). The Model Portfolio is developed and overseen by the fund’s non-discretionary investment sub-advisor, Raymond James & Associates, Inc. (“Raymond James”).

“After a prolonged period of relatively strong performance by passive, market-cap weighted indices, we believe that stock selection may play a more important role for investors in the years ahead,” said Ryan Issakainen, CFA, Senior Vice President, ETF Strategist at First Trust. “In our opinion, the equity research team at Raymond James (“Raymond James Equity Research”) has a robust, time-tested process for uncovering relatively attractive stocks with solid fundamentals. We believe RJMG is an effective tool for investors to gain exposure to some of Raymond James’ highest conviction ideas.”

RJMG invests in a portfolio of U.S.-listed equity securities with various market capitalizations that exhibit growth characteristics and are rated “Strong Buy” or “Outperform” by Raymond James Equity Research based on expected total returns and/or expected outperformance of the S&P 500^® Index. Raymond James provides a model portfolio of approximately 40 recommended investments and weightings (the “Model Portfolio”) to First Trust, the fund’s advisor, whose members of its investment committee serve as the fund’s portfolio managers and are responsible for the day-to-day management of the fund.

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 $210 billion as of December 29, 2023 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 https://www.ftportfolios.com.

About Raymond James Financial, Inc.

Raymond James Financial, Inc. (NYSE: RJF) is a leading diversified financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and municipalities. The company has approximately 8,700 financial advisors. Total client assets are $1.32 trillion. Public since 1983, the firm is listed on the New York Stock Exchange under the symbol RJF. Additional information is available at www.raymondjames.com.

You should consider a 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 a fund. The prospectus or summary prospectus should be read carefully before investing.

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Current market conditions risk is the risk that a particular investment, or shares of the fund in general, may fall in value due to current market conditions. As a means to fight inflation, the Federal Reserve and certain foreign central banks have raised interest rates and expect to continue to do so, and the Federal Reserve has announced that it intends to reverse previously implemented quantitative easing. Recent and potential future bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle East and the United States. The hostilities and sanctions resulting from those hostilities have and could continue to have a significant impact on certain fund investments as well as fund performance and liquidity. The COVID-19 global pandemic, or any future public health crisis, and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets, negatively impacting global growth prospects.

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Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.

Stocks with growth characteristics tend to be more volatile than certain other stocks and their prices may fluctuate more dramatically than the overall stock market.

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Large capitalization companies may grow at a slower rate than the overall market.

The portfolio managers of an actively managed portfolio will apply investment techniques and risk analyses that may not have the desired result.

Market risk is the risk that a particular security, or shares of a fund in general may fall in value. Securities are subject to market fluctuations caused by such factors as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious disease or other public health issues, recessions, natural disasters or other events could have significant negative impact on a fund.

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The market price of a fund’s shares will generally fluctuate in accordance with changes in the fund’s net asset value (“NAV”) as well as the relative supply of and demand for shares on the exchange, and a fund’s investment advisor cannot predict whether shares will trade below, at or above their NAV.

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Securities of small- and mid-capitalization companies may experience greater price volatility and be less liquid than larger, more established companies.

Trading on an exchange may be halted due to market conditions or other reasons. There can be no assurance that a fund’s requirements to maintain the exchange listing will continue to be met or be unchanged.

First Trust Advisors L.P. (FTA) is the adviser to the fund. FTA 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240118343126/en/

Ryan Issakainen

First Trust

(630) 765-8689

RIssakainen@FTAdvisors.com

Source: First Trust Advisors L.P.

FAQ

What is the ticker symbol for the new actively managed ETF launched by First Trust Advisors L.P.?

The ticker symbol for the new actively managed ETF launched by First Trust Advisors L.P. is 'RJMG'.

What is the investment focus of the FT Raymond James Multicap Growth Equity ETF?

The FT Raymond James Multicap Growth Equity ETF focuses on providing long-term capital appreciation by investing in U.S.-listed equity securities with growth characteristics.

Who oversees the model portfolio of the FT Raymond James Multicap Growth Equity ETF?

The model portfolio of the FT Raymond James Multicap Growth Equity ETF is developed and overseen by Raymond James Equity Research.

What is the criteria for selecting investments in the FT Raymond James Multicap Growth Equity ETF?

Investments in the FT Raymond James Multicap Growth Equity ETF are selected based on being rated 'Strong Buy' or 'Outperform' by Raymond James Equity Research.

How many recommended investments and weightings are provided in the model portfolio of the FT Raymond James Multicap Growth Equity ETF?

Approximately 40 recommended investments and weightings are provided in the model portfolio of the FT Raymond James Multicap Growth Equity ETF.

Who serves as the portfolio managers of the FT Raymond James Multicap Growth Equity ETF?

The members of the investment committee of First Trust, the fund's advisor, serve as the portfolio managers of the FT Raymond James Multicap Growth Equity ETF.