The First Trust US IPO Index UCITS ETF

Issuer: First Trust

Asset Class: Equity

TER: 65bps

Trading Currency: GBX

Pays Income: False

Listing Date: 18 Aug 2015

Ticker: FPX

ISIN: IE00BYTH6238

This actively managed fund offers targeted exposure to the U.S. equity market, with a distinct focus on newly public companies. Its core investment objective is to achieve long-term capital appreciation. The investment manager selects securities from a universe of companies that constitute a prominent index tracking U.S. initial public offerings (IPOs), spin-offs, and equity carve-outs. It is crucial to note that this is not a passive index-tracking product; instead, it leverages active management with the specific goal of outperforming this benchmark. This strategy provides access to a dynamic segment of the market where companies are often in their early, high-growth stages following their public debut.

The investment adviser employs a disciplined, rules-based selection process that integrates quantitative screening with rigorous fundamental research. This dual-pronged approach is designed to identify companies that not only operate in promising industries but also exhibit strong fundamentals, such as robust revenue growth, sustainable business models, and capable management teams. By actively curating the portfolio, the manager aims to capitalize on the potential of the most promising new entrants to the public markets while navigating the unique risks associated with them.

For an investor, this fund can serve as a satellite holding to a core equity allocation, offering the potential for alpha generation from a unique source of returns. It is best suited for those with a long-term investment horizon and a higher risk tolerance, acknowledging the inherent volatility of newly listed companies. The active management overlay is a key feature, intended to add value through expert stock selection in a specialized and often inefficient market niche.