First Trust ETF

Pros and cons of First Trust ETF

First Trust is not a leading ETF provider but then again it is not a small one neither. They have established many interesting ETF’s covering some very fine niches that I love as an individual investor. Here we will explore some of the strengths and weaknesses of First Trust as an ETF provider.

The pros of First Trust ETF

What are, in my opinion, the greatest assets of First Trust?

Going for some fine niche ETF’s

As we have said earlier First Trust has created some nice ETF’s around specific markets or industries. That is always a good choice for a smaller ETF provider, not going after the big ones by duplicating their offers but going where others do not bother to go.

A balanced offer of equity ETF’s

When you look at the list of ETF’s First Trust provides you will see that they are very strong in many different equity sectors. The regional balance is good, covering specific global areas and interesting industrial sectors.

The cons of First Trust ETF

There are no real cons to be discussed but here I will share some personal thoughts.

ETF’s traded in US Dollars

It is not a surprise that First Trust offers its ETF’s in US Dollars. They are a US based company and for a medium sized ETF provider it complicates matters to offer also ETF’s in Euro’s. For European investors the Dollar based ETF’s may be a challenge as you will also add a currency factor to your investments.

Not the cheapest ETF’s around

This is also a point of discussion. Some investors think the lower the ETF expenses the better the ETF provider. But this is not the case. When you offer a specific ETF aimed at a low volume niche market you cannot beat the expenses the most popular index ETF’s offer.

For me low costs of ETF’s is never a big issue. I always prefer to look at the balance within the ETF. How many companies are included in a sector ETF, what is the weighing, is it a physical ETF or a synthetic one and many more core questions. The expense ratio of the ETF does not bother me that much.

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