##  [# First Trust Converts Closed-End Income Fund to ETF](/sections/news/first-trust-converts-closed-end-income-fund-etf) 

 

# First Trust Converts Closed-End Income Fund to ETF

 

 

The fund focuses on dividend and quality factor investing.



 

 

 

 

 [![GabeAlpert310x310](/sites/default/files/styles/author_image_icon/public/2023-08/GabeAlpert310x310.png?itok=LtV5mb0-)](/authors/gabe-alpert) 

[By Gabe Alpert](/authors/gabe-alpert)

 Nov 28, 2023

 Edited by: Sean Allocca

 

 

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[First Trust Advisors L.P.](https://www.etf.com/topics/first-trust) recently [announced](https://www.businesswire.com/news/home/20231121868375/en/First-Trust-Announces-Completion-of-First-Trust-Dynamic-Europe-Equity-Income-Fund%E2%80%99s-Reorganization-into-First-Trust-Active-Global-Quality-Income-ETF) it has completed the conversion of its closed-end Dynamic Europe Equity Income Fund (FDEU) into an exchange-traded fund as conversions sweep the industry and the quality factor continues to dominate as 2023 winds down.

The closed-end fund, which focuses on dividend and quality factor investing, reopened as the [**First Trust Active Global Quality Income ETF (AGQI)**](https://www.ftportfolios.com/Common/ContentFileLoader.aspx?ContentGUID=b858dbd8-4339-4005-bc67-334a2e0fede8) last Tuesday, in the latest slew of conversions.   
   
The ETF, which is actively managed by Janus Henderson Investors, invests in companies from around the world that have growing [dividends](https://www.etf.com/topics/dividend) and a high return on equity, a strategy that is meant to provide geographically diversified exposure, as well as high income and a focus on the quality [factor](https://www.etf.com/sections/etf-strategist-corner/defining-quality-quality-etfs). While geographically diversified, the fund is still relatively concentrated, holding just 29 stocks.

Since March 2021, firms have converted more than 50 funds to ETFs totaling over $60 billion in assets, according to an August [report](https://www.fidelity.com/learning-center/trading-investing/ETF-conversion) from asset manager [Fidelity Investments](https://www.etf.com/topics/fidelity).

## **Quality Dominates, Dividends Lag** 

AGQI, which has an 0.85% expense ratio that exceeds the 0.69% average for [active ETFs](https://www.etf.com/topics/active-management), has experienced vastly different outcomes for its strategies of quality and dividend in 2023.

Dividend investing has taken a beating this year following the [Federal Reserve’s](https://www.etf.com/topics/fed) rapidly raised rates. That, in turn, has pushed up the yield of [Treasuries](https://www.etf.com/topics/treasury), making dividend yields look less attractive by comparison. After dividend ETFs pulled in a record $62 billion in inflows in 2022, less than the $1 billion so far this year has trickled in from investors, according to [Bloomberg](https://www.bloomberg.com/news/articles/2023-11-27/billions-wiped-out-as-stock-safety-trade-on-wall-street-misfires?sref=MAODZZNF).

The largest dividend ETF, the $70 billion [**Vanguard Dividend Appreciation ETF (VIG)**](https://www.etf.com/VIG)**,** has returned just 8.9% through Nov. 20, compared with a return of 20.1% for the broader U.S. market, represented by the [**SPDR S&amp;P 500 ETF Trust (SPY)**](https://www.etf.com/SPY)**.**

On the other hand, quality has trounced other factor-investing strategies. The $34 billion [**iShares MSCI USA Quality Factor ETF (QUAL)**](https://www.etf.com/QUAL)**,** has beaten [BlackRock Inc.'s](https://www.etf.com/topics/blackrock) other four factor ETFs, returning 25% this year compared with about 5% for the others.   
   
First Trust has 158 ETFs on U.S. markets with $124 billion in assets under management.

*Contact Gabe Alpert at* [*gabriel.alpert@etf.com*](mailto:gabriel.alpert@etf.com).

 
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 [ Gabe Alpert ](/authors/gabe-alpert) 

 

 

  Gabe Alpert is a former data reporter at etf.com with over seven years’ experience in financial journalism. He also previously contributed reporting…   [View Bio](/authors/gabe-alpert)

 



 

 


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