2 ETFs Making Big Changes

March 18, 2019

First Trust will be doing some major renovations on two of its ETFs. The First Trust NASDAQ Smartphone Index Fund (FONE) and the First Trust Heitman Global Prime Real Estate ETF (PRME) will both see some big changes.

FONE’s Makeover

For FONE, that means a change of index, ticker and objective, set to be effective May 29. Recently, Defiance ETFs rolled out the first-ever ETF to focus on 5G technology, the Defiance Next Gen Connectivity ETF (FIVG). But it won’t be alone for long. FONE will be adopting an index similar to the one it has now, but with a tilt toward 5G-specfic technology.

Its expense ratio will remain the same, but it will get a new name and ticker in addition to a new index. The renamed First Trust Indxx NextG ETF will use the ticker NXTG and track the Indxx 5G & NextG Thematic Index.

Real Estate ETFs Merging

Meanwhile, the actively managed PRME will be merging into the First Trust FTSE EPRA/NAREIT Developed Markets Real Estate (FFR) by the end of the year.

Heitman, a real estate investment management firm, has served as the subadvisor for PRME, targeting high-quality global real estate assets. However, the fund, which launched in 2015 and has an expense ratio of 0.95%, only has $2 million in assets under management and has underperformed FFR over the past few years.

FFR, in contrast, has nearly $50 million in assets and comes with an expense ratio of 0.60%. While it is not a global fund, it targets REITs in developed markets.

Contact Heather Bell at [email protected]

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