Key Takeaways
- • First Trust Advisors L.P. launched the First Trust Multi-Strategy Alternative ETF (NYSE Arca: LALT), an actively managed fund seeking long-term total return through alternative asset exposure.
- • LALT will primarily invest in exchange-traded products, including ETFs, exchange-traded notes, and commodity or currency-backed trusts, to gain alternative exposure.
- • The fund targets lower correlation to traditional equity and fixed income benchmarks across strategies including hedged equity, long/short, event driven, managed futures, commodities, real estate, opportunistic fixed income, relative value, currencies, and global macro.
- • First Trust cites a difficult year for stocks and bonds as driving demand for alternatives, per ETF strategist Ryan Issakainen, CFA.
- • First Trust reported approximately $190 billion in collective assets under management or supervision as of December 30, 2022.
Summary
First Trust Advisors L.P. ("First Trust"), an ETF provider and asset manager based in Wheaton, Illinois, announced the launch of the First Trust Multi-Strategy Alternative ETF (NYSE Arca: LALT). The fund is actively managed and seeks to provide long-term total return.
LALT will primarily gain exposure to alternative asset categories and strategies by investing in exchange-traded products, including ETFs, exchange-traded notes (ETNs), and trusts backed by physical commodities or currencies. The fund's stated objective is lower correlation and more diversified risk exposures across market cycles relative to traditional equity and fixed income benchmarks. Its targeted strategies include hedged equity, long/short, event driven, managed futures, commodities, real estate, opportunistic fixed income, relative value, currencies, and global macro.
Ryan Issakainen, CFA, Senior Vice President and ETF Strategist at First Trust, said that after a difficult year for both stocks and bonds, demand for alternatives has grown stronger. He stated the ETF may be an effective tool for investment professionals seeking to diversify client portfolios while potentially generating returns from multiple alternative risk premiums.
First Trust is a federally registered investment advisor and serves as the fund's investment advisor. The firm reported approximately $190 billion in collective assets under management or supervision as of December 30, 2022, across unit investment trusts, ETFs, closed-end funds, mutual funds, and separate managed accounts. The release notes that diversification does not guarantee a profit or protect against loss, and the prospectus materials flag risks including those tied to complex alternative strategies, commodities, derivatives, ETNs, and counterparty exposure.
LALT will primarily gain exposure to alternative asset categories and strategies by investing in exchange-traded products, including ETFs, exchange-traded notes (ETNs), and trusts backed by physical commodities or currencies. The fund's stated objective is lower correlation and more diversified risk exposures across market cycles relative to traditional equity and fixed income benchmarks. Its targeted strategies include hedged equity, long/short, event driven, managed futures, commodities, real estate, opportunistic fixed income, relative value, currencies, and global macro.
Ryan Issakainen, CFA, Senior Vice President and ETF Strategist at First Trust, said that after a difficult year for both stocks and bonds, demand for alternatives has grown stronger. He stated the ETF may be an effective tool for investment professionals seeking to diversify client portfolios while potentially generating returns from multiple alternative risk premiums.
First Trust is a federally registered investment advisor and serves as the fund's investment advisor. The firm reported approximately $190 billion in collective assets under management or supervision as of December 30, 2022, across unit investment trusts, ETFs, closed-end funds, mutual funds, and separate managed accounts. The release notes that diversification does not guarantee a profit or protect against loss, and the prospectus materials flag risks including those tied to complex alternative strategies, commodities, derivatives, ETNs, and counterparty exposure.
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