Alternative Investments: First Trust Unveils ETF Focused On Alternative Assets
The LALT ETF provides exposure to alternative investments that can diversify risk, enhance returns or generate higher yield than traditional investments.
First Trust has launched an actively managed ETF called the First Trust Multi-Strategy Alternative ETF (NYSEARCA: LALT). The fund aims to provide long-term total return by investing in alternative asset categories and strategies using exchange-traded products, such as ETFs, ETNs, and trusts backed by physical commodities or currencies.
The aforesaid alternative asset categories and strategies include, but are not limited to, the following: hedged equity; long/short; event driven; managed futures; commodities; real estate; opportunistic fixed income; relative value; currencies; and global macro. (Businesswire)
LALT seeks to provide lower correlation and more diversified risk exposures compared to traditional equity and fixed income benchmarks. The fund is intended to be an effective tool for investment professionals seeking to diversify client portfolios and generate returns from multiple alternative risk premiums.
Annual expenses of the fund are 1.23%.
LALT’s Top holdings as on 2/13/2023*
First Trust Alternative Absolute Return Strategy ETF 21.55%
First Trust Managed Futures Strategy Fund 21.27%
First Trust Merger Arbitrage ETF 11.86%
First Trust Long/Short Equity ETF 10.30%
First Trust Low Duration Opportunities ETF 10.08%
First Trust TCW Unconstrained Plus Bond ETF 10.08%
First Trust Global Tactical Commodity Strategy Fund 9.79%
Invesco CurrencyShares Swiss Franc Trust 5.01%
* Excluding cash.
“After a difficult year for both stocks and bonds, it’s no surprise that demand for alternatives has grown stronger,” said Ryan Issakainen, CFA, Senior Vice President and ETF Strategist at First Trust. “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.”
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