First Trust/Confluence Small Cap Value Fund Class A (FOVAX)

Overview

The fund operates with a clear focus on investing predominately in preferred securities and other financial instruments that share similar economic characteristics. Its investment strategy is carefully aligned with its primary objective of achieving significant returns from its allocated assets. The fund is committed to maintaining at least 80% of its net assets, this includes the leverage from investment borrowings, in these preferred securities. This strategic approach is designed to navigate normal market conditions, aiming to provide investors with a stable and potentially lucrative investment avenue. The portfolio is managed by a team of experienced professionals who actively monitor the markets to adapt the fund's investment strategy as necessary to optimize returns.

Products and Services

The fund's focus on preferred securities and similar economic instruments constitutes the cornerstone of its product offerings,

• Preferred Securities: A prime component of the fund's investment strategy, preferred securities are financial instruments that offer investors fixed or variable income returns. These securities rank higher than common stock in terms of dividend payments and in the event of a liquidation, but they may rank below bonds. The fund's significant investment in preferred securities seeks to capitalize on the unique benefits these instruments provide, such as potentially higher yields compared to common stock, and a greater degree of stability and income consistency.
• Other Securities with Similar Economic Characteristics: In addition to preferred securities, the fund invests in a variety of financial instruments that exhibit similar economic characteristics. This may include but is not limited to, hybrid securities that combine features of both debt and equity, convertible bonds that can be converted into a predetermined amount of the company's equity, and subordinated debt which offers potentially higher yields in exchange for higher risk. This diversification strategy is designed to mitigate risk while seeking to enhance the overall potential for return on investment.