Daily ETF Watch: New Long/Short Fund

First Trust wants to bring an active long/short ETF to market.

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Reviewed by: Hung Tran
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Edited by: Hung Tran

First Trust wants to bring an active long/short ETF to market.

First Trust has put into registration an actively managed “alternative” fund dubbed the First Trust Long/Short Equity ETF at a time when the jury is still out on active and alternative ETFs of all stripes.

Alternative ETFs manage just $1.59 billion of the $1.747 trillion in total U.S.-listed ETF assets, according to data compiled by ETF.com Analytics. The new ETF will compete with nine long/short equity strategies, two of them active and from AdvisorShares, according to the ETF.com Analytics “Fund Finder” tool.

The biggest active fund in the bunch is the AdvisorShares Accuvest Global Long Short ETF (AGLS | F-51), and it has about $31 million in assets. The biggest of all in the category is the ProShares RAFI Long/Short ETF (RALS | D-95), an index strategy with almost $50 million in assets.

The proposed First Trust fund intends to put on long and short positions in a portfolio of equity securities and in ETFs, according to its filing. Having both long and short positions in an equity security portfolio offsets one another, resulting in a lower net exposure to the direction of the market, the filing said.

It didn’t name a ticker or an expense ratio. AGLS from AdvisorShares costs 4.28 percent a year, while RALS from ProShares costs 0.95 percent, or $95 for each $10,000 invested.

Filing

Effective immediately, the ETF formerly known as the Jefferies TR/J CRB Global Commodity Equity Index Fund (CRBQ | D-96) has changed its name to the Global Commodity Equity ETF, according to an NYSE communique.

The methodology of the underlying index—the Thomson Reuters CRB Commodity Producers Index, a cap-weighted, float-adjusted index—and ticker will not change.

 

Hung Tran is a former staff writer for etf.com.