On May 14, 2025, three new active ETFs from the First Trust family were listed on Xetra and Börse Frankfurt, further expanding the range of traded financial products in the European market.
Sign up to our free newsletters
By ETFWorld.co.uk
Rupert Haddon Managing Director at First Trust Global Portfolios
Focus on Hedging Strategies, Reduced Duration, and Capital Protection
These instruments reflect growing investor demand for flexible, specialized solutions that combine active management with risk-mitigation mechanisms.
1. First Trust Factor FX UCITS ETF – Class C EUR (Hedged)
This ETF stands out for its strategy focused on global government bond markets, investing in securities denominated in local currencies of developed and emerging countries, as well as currency-linked derivative instruments. The portfolio’s average duration is expected to be under two years, while the share class is shielded from currency fluctuations through hedging operations. With an annual cost of 0.75%, it is an accumulating ETF.
2. First Trust Low Duration Global Government Bond UCITS ETF – Class C EUR
This ETF also invests in global investment-grade government bonds but emphasizes reduced duration and active currency risk management. Through hedging, the fund’s currency exposure is minimized, making it suitable for investors sensitive to exchange rate volatility. Management costs are lower (0.55% annually), and it follows an accumulating structure.
3. First Trust Vest U.S. Equity Buffer UCITS ETF – April – A USD Accu
The third ETF introduces an innovative strategy tied to the U.S. equity market. It aims to replicate the performance of the S&P 500 index but includes a gain cap (capping) and protection against losses of up to 10% over a defined annual period (April to April). To achieve this, the fund fully invests in customized FLEX options. With costs of 0.85%, it is the most expensive of the new launches but offers unique downside protection.
Trends and Implications for Investors
The rise of active ETFs, like those from First Trust, marks a shift from the traditional preference for passive index funds. While passive ETFs remain dominant due to tax efficiency and transparency, active products are gaining traction by adapting to volatile markets and integrating sophisticated strategies, such as currency hedging or loss buffers.
For investors, these new listings represent opportunities to diversify portfolios, particularly in a climate of macroeconomic uncertainty. However, it is critical to weigh the higher costs compared to passive ETFs and the potential long-term impact of active strategies on returns.
Source: ETFWorld
Subscribe to Our Newsletter
