First Trust Launches Multi-Strategy Alternatives ETF

First Trust Unveils Multi-Strategy Alternative ETF

New ETF offers investors diversified access to alternative investment strategies.

Wheaton, IL, 2023-02-15

By Time.news Staff.

First Trust Advisors has entered the alternative investment space with a new actively managed exchange-traded fund (ETF), designed to give investors exposure to various strategies.

• First Trust launched the Multi-Strategy Alternative ETF (LALT).
• LALT will invest in other First Trust ETFs covering various alternative asset classes.
• The ETF has an expense ratio of 1.23%.

Looking to diversify your portfolio? First Trust Advisors has just launched the Multi-Strategy Alternative ETF (LALT), an actively managed ETF-of-ETFs designed to provide diversified exposure to alternative asset categories and strategies. This move aims to give investors a new tool for navigating the market.

First Trust Advisors.

Inside the New ETF

The new LALT ETF will invest in other First Trust ETFs. These include hedged equity, long/short, event-driven, managed futures, commodities, real estate, opportunistic fixed income, relative value, currencies, and global macro strategies. It’s like a diversified investment basket, all wrapped up in one ETF.

LALT is listed on the NYSE Arca and has an expense ratio of 1.23%. Within that, 1.03% covers acquired fund fees and expenses. The goal is to enhance traditional equity/fixed income portfolios by boosting total returns and helping to diversify overall risk.

A Word from the Strategist

Ryan Issakainen, CFA, Senior Vice President and ETF Strategist at First Trust, based in Wheaton, IL, believes this ETF could be a game-changer. He stated, “We believe this ETF may be an effective tool for investment professionals seeking to diversify client portfolios while also potentially generating returns from multiple alternative risk premiums in the years ahead.”

The fund’s construction considers each strategy’s risk and return profile, as well as its correlation to other alternative strategies and to typical equity and fixed income markets.

First Trust’s Footprint

First Trust currently manages approximately $190 billion through various investment vehicles. This includes unit investment trusts, exchange-traded funds, closed-end funds, mutual funds, and separate managed accounts. This launch represents a further expansion of their offerings.

First Trust Multi-Strategy Alternative ETF (LALT): A Guide for Investors

Exploring the World of Alternative Investments

In the ever-evolving investment landscape, diversification remains key. First Trust Advisors recognized this and launched the Multi-Strategy Alternative ETF (LALT) to provide investors with a straightforward way to access alternative investment strategies.

This article delves into what LALT is, how it effectively works, its potential benefits, and who might find it a valuable addition to their portfolio. Understanding these features is crucial for making informed investment decisions in a market full of options.

What is the first Trust Multi-Strategy Alternative ETF (LALT)?

LALT is an actively managed exchange-traded fund, or ETF, designed to offer investors diversified exposure to various alternative asset categories. It’s essentially an “ETF-of-ETFs”. This approach allows investors to gain exposure to multiple alternative strategies within a single fund.

The fund aims to provide investors with access to investment strategies that historically have low correlations to customary equity and fixed-income investments. This can potentially reduce overall portfolio risk and potentially improve returns.

How Does LALT Work?

LALT achieves diversification by investing in other First trust ETFs.These underlying etfs cover a range of alternative asset classes and strategies. This includes several areas within the investment world.

• Hedged Equity
• Long/Short Strategies
• Event-Driven Investments
• Managed Futures
• Commodities
• Real Estate
• Opportunistic Fixed Income
• Relative Value
• Currencies
• Global Macro Strategies

The fund’s managers carefully consider each strategy’s risk and return profile, as well as its correlation to other alternative strategies and to traditional markets. The expense ratio for LALT is 1.23%, of which 1.03% covers acquired fund fees and expenses.

Benefits of Investing in LALT

Investing in LALT offers several potential advantages for investors seeking diversification and alternative investment exposure.

• Diversification: Provides exposure to a range of alternative investment strategies, helping to spread risk.
• professional Management: The fund is actively managed by a team of experienced professionals who make allocation and security selection decisions.
• Accessibility: ETFs like LALT are traded on exchanges, making them easy to buy and sell, offering liquidity to investors.
• Potential for Enhanced Returns: Alternative strategies have historically offered the potential for attractive returns, potentially boosting overall portfolio performance.

Who is LALT For?

This ETF may be suitable for a variety of investors, including:

• Investors seeking diversification: Those looking to reduce risk and enhance returns by adding alternative asset exposure.
• Portfolio managers: Investment professionals seeking to diversify client portfolios with potentially uncorrelated assets.
• Individual investors: Those looking for a convenient way to access multiple alternative strategies efficiently.

LALT is designed to provide diversified exposure to alternative asset categories and strategies. This approach aims to enhance traditional equity/fixed income portfolios by potentially boosting total returns while helping diversify overall risk. The ETF offers investors a simple way to gain access to a professionally managed, diversified portfolio of alternative investments.

Myths vs. Facts

Myth	Fact
Alternative investments are only for institutional investors.	LALT makes alternative investment strategies accessible to a broader range of investors.
Alternative investments are always high-risk.	LALT aims to diversify risk by investing in multiple alternative strategies.

FAQs: Your Questions Answered

Here are some common questions about the First Trust Multi-Strategy Alternative ETF:

What is an ETF? An Exchange Traded Fund (ETF) is a type of investment fund traded on stock exchanges, similar to individual stocks.

What are alternative investments? These are investment strategies and asset classes other than stocks, bonds, and cash–such as real estate, commodities, or managed futures.

What is the expense ratio of LALT? The expense ratio of LALT is 1.23%.

Is LALT suitable for all investors? LALT might potentially be suitable for those seeking alternative investment exposure,but it is indeed essential to consider investment goals and risk tolerance.

Can I buy LALT in a brokerage account? Yes, LALT is listed on the NYSE Arca and can be bought and sold through moast brokerage accounts.

First Trust currently manages approximately $190 billion through various investment vehicles. This fund’s construction considers each strategy’s risk and return profile, as well as its correlation to other alternative strategies and to typical equity and fixed income markets. Investors should carefully consider its overall investment goals before investing in the fund.