First Trust Launches the First Trust TCW ESG Premier Equity ETF

An actively managed ETF that provides exposure to companies that place value on their environmental, social and corporate governance (ESG) factors.

First Trust Advisors L.P. (“First Trust”), a leading exchange-traded fund (“ETF”) provider and asset manager, announced today that it has launched a new actively managed ETF, the First Trust TCW ESG Premier Equity ETF (NYSE Arca: EPRE) (the “fund”). The fund seeks to provide long-term capital appreciation by investing primarily in U.S. equity securities with an emphasis on large capitalization companies that meet ESG criteria, as determined by TCW Investment Management Company LLC (TCW), the fund’s sub-advisor.

ESG investing considers a company’s environmental, social and governance factors via independent ratings to align investment strategies with personal values. TCW believes a focus on these factors can provide competitive advantages for a company. “The First Trust TCW ESG Premier Equity ETF is a highly active, concentrated portfolio of companies that prudently manage their environmental, social, and financial resources and generate consistent and growing levels of free cash,” said Joseph R. Shaposhnik, Portfolio Manager at TCW. “We strongly believe that utilizing ESG performance data helps us uncover better managed businesses for the benefit of investors.”

TCW uses both qualitative and quantitative screening criteria to supplement its fundamental research and portfolio selection. The screening process focuses on companies whose shares are trading at prices that are below intrinsic value, as determined by TCW. The portfolio is selected using rigorous fundamental analysis and quantitative ESG framework to drive the security selection and execution strategies.

“While many ESG strategies focus primarily on excluding stocks that score poorly on certain environmental, social, or governance metrics, we believe that professional management can add value. By leveraging the best thinking of the world-class team at TCW, this actively managed ETF provides another unique tool for investment professionals,” said Ryan Issakainen, CFA, Senior Vice President, ETF Strategist at First Trust.

Joseph R. Shaposhnik, the fund’s portfolio manager, is responsible for the day-to-day management of the fund.

For more information about First Trust, please contact Ryan Issakainen at (630) 765-8689 or RIssakainen@FTAdvisors.com.

About First Trust

First Trust is a federally registered investment advisor and serves as the fund’s investment advisor. First Trust and its affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately held companies that provide a variety of investment services. First Trust has collective assets under management or supervision of approximately $194 billion as of April 30, 2021 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts. First Trust is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. First Trust and FTP are based in Wheaton, Illinois. For more information, visit https://www.ftportfolios.com.

About TCW Investment Management Company LLC

TCW Investment Management Company LLC is a wholly owned subsidiary of The TCW Group, Inc. (TCW Group), which is a leading global asset management firm with nearly five decades of investment experience. Established in 1971 in Los Angeles, California, TCW Group manages a broad range of products across fixed income, equities, emerging markets and alternative investments. Through the TCW, MetWest and TCW Alternative Fund Families, TCW manages one of the largest mutual fund complexes in the U.S. Its clients include many of the world’s largest corporate and public pension plans, financial institutions, endowments and foundations, as well as financial advisors and high net worth individuals. With a high level of employee ownership, TCW is committed to providing disciplined, team-managed investment processes that have been tested across market cycles. As of March 31, 2021, TCW Group had $253 billion in assets under management.

You should consider the fund’s investment objectives, risks, and charges and expenses carefully before investing. Contact First Trust Portfolios L.P. at 1-800-621-1675 to obtain a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.

Risk Considerations

A fund’s shares will change in value, and you could lose money by investing in a fund. One of the principal risks of investing in a fund is market risk. Market risk is the risk that a particular stock owned by a fund, fund shares or stocks in general may fall in value. There can be no assurance that a fund’s investment objective will be achieved. The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. The COVID-19 pandemic may last for an extended period of time and will continue to impact the economy for the foreseeable future.

In managing the fund’s investment portfolio, the sub-advisor will apply investment techniques and risk analyses that may not have the desired result.

A fund may be a constituent of one or more indices which could greatly affect a fund’s trading activity, size and volatility.

A fund with significant exposure to a single asset class, country, region, industry, or sector may be more affected by an adverse economic or political development than a broadly diversified fund.

Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Market prices may differ to some degree from the net asset value of the shares. Investors who sell fund shares may receive less than the share’s net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, unlike mutual funds, shares may only be redeemed directly from a fund by authorized participants, in very large creation/redemption units. If a fund’s authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a discount to a fund’s net asset value and possibly face delisting.

Due to its ESG investment screening, the fund may not be able to invest in certain companies or industries and may forgo certain investment opportunities. This could result in lower performance than other funds without an ESG screen. Investors may differ in their views of ESG characteristics and the fund may invest in companies that do not reflect the beliefs and values of any particular investor.

The fund is classified as “non-diversified” and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.

Small- and mid-capitalization companies may experience greater price volatility than larger, more established companies.

As the use of Internet technology has become more prevalent in the course of business, the fund has become more susceptible to potential operational risks through breaches in cyber security.

Trading on the exchange may be halted due to market conditions or other reasons. There can be no assurance that the requirements to maintain the listing of the fund on the exchange will continue to be met or be unchanged.

Large inflows and outflows may impact a new fund’s market exposure for limited periods of time.

First Trust Advisors L.P. is the adviser to the fund. First Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P., the fund’s distributor.

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.

Source: First Trust Advisors L.P.

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