The company plans to offer a multi-asset-class income-generating fund for an age of paltry yields.
First Trust filed regulatory paperwork that would bring to market a non-U.S.-focused, multi-asset-class ETF designed to deliver solid income at a time when bond yields are low and fixed-income markets are looking vulnerable to a big sell-off as the Federal Reserve begins signaling that the post-crash era of ultra-easy monetary policy may finally be starting to end.
The International Multi-Asset Diversified Income Index Fund will track a Nasdaq index of the same name that will be composed of five non-U.S. pockets of the investment universe: dividend-paying stocks; REITS; preferred securities; infrastructure companies; and undisclosed fixed-income ETFs, according to the prospectus.
The fund will join a growing field of ETFs that have been brought to market to offer investors comprehensive solutions to the challenges of a low-yield world, including the Guggenheim Multi-Asset Income ETF (NYSEArca: CVY), a $1 billion fund that has an international focus just like the fund First Trust is putting into registration. First Trust is already marketing the First Trust Multi-Asset Diversified Income ETF (NYSEArca: MDIV), and it is close to becoming a $500 million fund.
The fund may over- or underweight depending on market conditions, and the index will be rebalanced quarterly.
The fund will be listed on the Nasdaq. First Trust hasn’t yet given the fund a ticker or expense ratio.