Daily ETF Watch: Mortgage REIT Fund Planned

First Trust follows up launch of Heitman global real estate ETF with plans for REIT fund.

Reviewed by: Heather Bell
Edited by: Heather Bell

Less than a month after the launch of the First Trust Heitman Global Prime Real Estate ETF (PRME), First Trust has filed for another actively managed ETF focused on the real estate space. The First Trust Strategic Mortgage REIT ETF will invest mainly in U.S. mortgage REITs, but it can also invest up to 20% of its portfolio in mortgage-backed securities and in real estate-related options.

The fund can also engage in short sales of the securities it holds, but its short sales must be no more than 30% of the fund’s total assets.

The First Trust ETF’s overall approach will be both qualitative and quantitative, selecting holdings via a top-down investment process and based on macroeconomic expectations. The fund will apply hedging as needed when interest rates rise and during periods of monetary contraction, the press release said.

The filing did not include a ticker or expense ratio, but did indicate the fund would launch on Nasdaq.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.