First Trust Alternative Absolute Return Strategy ETF (FAAR)
NASDAQ (NMS) NASDAQ (NMS) Primary Summary
FAAR Chart
FAAR: You Will Not Get Far Using This ETF
First Trust Alternative Absolute Return Strategy ETF employs an active long-short commodities strategy aiming for absolute returns in any market environment. FAAR currently maintains a +54% net long exposure but can shift net exposures dynamically across commodity sectors using futures. Despite its flexible approach, FAAR has significantly underperformed peers over five years, with higher volatility (11.2% SD) and a steep 0.97% expense ratio.
First Trust Alternative Absolute Return Strategy ETF Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| JD Jim Dushek HARBOUR INVESTMENTS Inc. | 5,849 | $170,290.41 | $182,020.88 | $11,730.47 | 6.89% |
 Jeff Ameen Spire Wealth Management | 253 | $7,499.81 | $7,958.11 | $458.3 | 6.11% |
 Kyle P. Smith NewEdge Wealth LLC | 18,175 | $511,632.57 | $565,424.25 | $53,791.68 | 10.51% |
| KC Kasey Cook Maripau Wealth Management LLC | 7,950 | $221,854.13 | $247,642.5 | $25,788.37 | 11.62% |
| CAL CoreCap Advisors LLC CoreCap Advisors LLC | 3,419 | $102,005.55 | $106,689.89 | $4,684.34 | 4.59% |
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First Trust Alternative Absolute Return Strategy ETF Profile
| NASDAQ (NMS) Exchange | US Country |
Overview
The fund is structured as an actively managed exchange-traded fund (ETF) with a strategic focus on long-term total return. It primarily targets indirect investments in exchange-traded commodity futures contracts through a specialized subsidiary. Unlike traditional funds that might directly engage in commodity futures, this fund utilizes a wholly-owned subsidiary established under the laws of the Cayman Islands to oversee these investments. The formulation of this strategy underlines a complex yet innovative approach to commodity investment, attempting to mitigate direct market exposures and leveraging the regulatory frameworks offered by the Cayman Islands. This setup is further characterized by an exclusive investment in the Subsidiary to gain the desired exposure to commodity futures, signifying a distinctive indirect investment pathway.
Products and Services
- Exchange-Traded Commodity Futures Contracts
- Investment through a Cayman Islands Subsidiary
- Advisory by First Trust Advisors L.P.
This fund focuses on achieving long-term total returns by engaging in long and short positions in exchange-traded commodity futures contracts. However, it avoids direct investment in these futures. Instead, the exposure to commodity futures is accomplished through investment in a dedicated subsidiary. This method allows the fund to target the commodities market while attempting to manage the risk and regulatory implications associated with direct futures contracts.
Integral to its operational model, the fund invests exclusively in a wholly-owned subsidiary organized under the laws of the Cayman Islands, known as the "Subsidiary". This unique structure is leveraged to navigate the complex regulatory and risk environment of commodity futures trading. By channeling investments through the Subsidiary, the fund aims to utilize the financial and regulatory efficiencies provided by the Cayman Islands jurisdiction, potentially offering a layer of risk mitigation and tax optimization.
First Trust Advisors L.P. serves as the investment advisor both to the fund and its Cayman Islands Subsidiary. This alignment ensures that the strategic objectives and investment decisions are consistently applied across the fund's entire operational structure. Employing First Trust Advisors L.P.'s expertise, the fund endeavors to navigate the commodities market strategically, intending to safeguard and grow investor capital through informed and agile management of commodity futures exposure.
