First Trust Expands European ETF Range with Growth Strength UCITS Fund

First Trust has launched a new UCITS ETF targeting European companies with strong growth and quality metrics.

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By ETFWorld.co.uk

Rupert Haddon Managing Director at First Trust Global Portfolios

The First Trust Europe Growth Strength UCITS ETF (FTEG) began trading on the London Stock Exchange on December 11, 2025.

The fund is designed as a passive, rules-based product. It tracks the Europe Growth Strength Index and has a Total Expense Ratio (TER) of 0.60%.

Investment Strategy and Index Methodology

The ETF’s objective is to replicate the performance of its underlying index. This index uses a multi-step screening process to select 50 European equities.

• Quality Screen: The process starts by filtering for companies with robust balance sheets. Eligible firms must have at least $250 million in cash, a return on equity exceeding 15%, and a debt-to-market capitalization ratio below 30%. They must also have positive shareholder equity and at least four years of trading history.

• Growth Ranking: Companies that pass the quality screen are then ranked based on their three-year revenue growth and three-year cash flow growth. The 50 companies with the highest combined scores are selected for the index.

• Portfolio Construction: The selected stocks are held in an equally weighted portfolio. The index is rebalanced semi-annually in March and September. Rules limit exposure to any single industry to a maximum of 15 securities to enforce diversification.

The fund is classified as an Article 8 product under the EU’s Sustainable Finance Disclosure Regulation (SFDR), indicating it promotes environmental or social characteristics.

Analysis for European Investors

The launch of FTEG provides European investors with a rules-based tool to target a specific factor combination: growth and quality. The strategy’s focus on companies with strong cash positions and low debt is intended to identify firms potentially resilient across various market conditions.

The existing US fund’s history suggests the index philosophy has been applied in live markets for over three years. However, the European version’s performance will depend on the specific constituents selected by its distinct regional screening process.

The First Trust Europe Growth Strength UCITS ETF is now available for trading. Investors should consult the fund’s prospectus for complete details on risks and the index methodology.

Source: ETFWorld