First Trust Preferred Securities and Income ETF

Frequently Asked Questions About FPE

What does FPE invest in?

First Trust Exchange-Traded Fund III - First Trust Preferred Securities and Income ETF is an exchange traded fund launched and managed by First Trust Advisors LP. The fund is co-managed by Stonebridge Advisors, LLC. It invests in the fixed income markets of global region. The fund invests in preferred securities and income-producing debt securities, including corporate bonds, high yield securities, convertible securities, and investment grade securities. The fund invests in average duration of three to 12 years. It employs fundamental analysis with top down and bottom up security picking approach to create its portfolio. The fund seeks to benchmark the performance of its portfolio against the ICE BofA US Investment Grade Institutional Capital Securities Index, Bloomberg US Aggregate Bond Index and the Blended Index comprising of 30% of the ICE BofA Core Plus Fixed Rate Preferred Securities Index, 30% of the ICE BofA US Investment Grade Institutional Capital Securities Index, 30% of the ICE USD Contingent Capital Index and 10% of the ICE BofA US High Yield Institutional Capital Securities Index. First Trust Exchange-Traded Fund III - First Trust Preferred Securities and Income ETF was formed on February 11, 2013 and is domiciled in the United States.

What is the expense ratio of FPE?

First Trust Preferred Securities and Income ETF (FPE) charges an expense ratio of 0.83%. This is the annual fee deducted from fund assets to cover management and operations.

What is FPE's dividend yield?

FPE's trailing-twelve-month yield is 6.42%, calculated from the sum of dividends over the past year divided by the current price.

What is the duration of FPE?

Effective duration measures FPE's sensitivity to interest-rate changes — a duration of 6 means a 1% rate move shifts NAV by roughly 6% in the opposite direction. FPE's current duration is published on the fund's factsheet on the issuer's website.

What is the credit quality of FPE?

FPE's credit quality breakdown — the share of holdings rated AAA through CCC and below — is published on the fund's factsheet. Higher-quality (investment-grade) funds yield less but carry less default risk than high-yield / junk bond funds.

What is the yield to maturity of FPE?

Yield to maturity (YTM) is the total return you'd earn from FPE if every bond in the portfolio is held to maturity at the current price. FPE's YTM is published on the fund's factsheet on the issuer's website — it differs from the trailing-12-month yield because YTM reflects current bond prices rather than historical income paid.