First Trust goes after municipal bonds.Byline: news@cpifinancial.net (Staff Writer) First Trust Advisors said it has created two new managed account portfolios which invest primarily in closed-end funds Closed-end fund An investment company that issues shares like any other corporation and usually does not redeem its shares. A publicly traded fund sold on stock exchanges or over the counter that may trade above or below its net asset value. Related: Open-end fund. available in the secondary market. A municipal closed-end fund portfolio, which seeks to provide tax-exempt income Tax-exempt income Dividends and interest not subject to federal and, in some cases, state and local income taxes. , with the potential for total return as a secondary objective, focuses on municipal bond closed-end funds. A taxable fixed-income closed-end fund portfolio is also available and focuses on the taxable fixed-income closed-end fund universe. Both portfolios have $100,000 investment minimums and approximately 30-40 holdings. The portfolios are managed by two veterans of the closed-end fund industry, Ken Fincher and Jeff Margolin, at the direction of First Trust Advisors' Investment Committee. Scott Hall This article is about the professional wrestler. For the Leeds suburb, see Scott Hall, England. For Japanese comedian and wrestler Razor Ramon HG, see . Scott Oliver Hall , Managing Director of First Trust Advisors, stated "often times the closed-end fund marketplace can be incredibly inefficient, thus creating many attractive opportunities. First Trust Advisors created these managed accounts to take advantage of these opportunities as well as to provide a value-added service A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. to the advisor community whose clients invest in closed-end funds." The municipal managed account, called First Trust Municipal Closed-End Fund Portfolio, begins with a universe of approximately 110 national municipal closed-end funds. Each fund undergoes a rigorous screening process to identify which funds Fincher and Margolin believe will outperform their peers. The municipal managed account also has the ability to invest in municipal exchange-traded funds Exchange-traded funds (or ETFs) are Open Ended investment companies that can be traded at any time throughout the course of the day. Typically, ETFs try to replicate a stock market index such as the S&P 500 (e.g. (ETFs) as well as state-specific closed-end funds. The taxable fixed-income managed account, called First Trust Taxable Fixed-Income Closed-End Fund Portfolio, begins with a defined universe of approximately 150 taxable fixed-income closed-end funds from several categories including: convertible, high yield, investment-grade corporate, global, US Government, mortgage, senior loan, limited duration and multi-sector. This portfolio may also hold fixed-income ETFs. In an effort to screen the large universe of closed-end funds, First Trust Advisors has developed a proprietary screening process that ranks funds using both fundamental and performance criteria. The fundamental categories include, but are not limited to, leverage, call protection, premium/discount to NAV See navigation system and navigation bar. , credit quality, sector, duration, sponsor and volume. The performance categories include, but are not limited to return on net asset value over multiple periods, distribution rate, earnings/distribution and undistributed Adj. 1. undistributed - (of investments) not distributed among a variety of securities undiversified - not diversified net investment income. "While the managers will rely on the fundamental and performance screens to identify the best closed-end funds in the marketplace, the portfolios are model-driven but not model-constrained," said Scott Hall. "Ken and Jeff intend to use their 34 years of combined experience in the closed-end fund industry to manage these new portfolios and to choose funds which they believe are being undervalued Undervalued A stock or other security that is trading below its true value. Notes: The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. by the market. We believe many advisors and their investors are currently very interested in this type of portfolio," he added. 2009 CPI (1) (Characters Per Inch) The measurement of the density of characters per inch on tape or paper. A printer's CPI button switches character pitch. (2) (Counts Per I Financial. All rights reserved. Provided by Syndigate.info an Albawaba.com company |
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