First Trust Advisors, an exchange-traded fund provider and asset manager, launched a new actively managed ETF, the First Trust TCW Emerging Market Debt ETF.
The fund seeks to provide high total return from current income and capital appreciation by investing in emerging market debt. The portfolio is sub-advised and managed by TCW Investment Management Company.
“We believe professional management for fixed income assets is more important than ever. This actively managed ETF provides another tool for investment advisors seeking to capitalize on opportunities in emerging markets fixed income by leveraging the best thinking of the world-class team at TCW,” Ryan Issakainen, CFA, senior vice president and ETF strategist at First Trust, said.
“In this portfolio, TCW takes a total return approach, investing across hard currency emerging market sovereigns and corporates. We seek to capture inflection points — whether driven by structural reforms, political change or improving growth dynamics — in an effort to capture the greatest risk/reward for the benefit of our investors,” Alex Stanojevic, group managing director and portfolio manager for TCW, said.
“Furthermore, in many cases, debt to GDP ratios in emerging market countries are lower than in the developed world, and with over 65% of debt globally yielding below 2%, according to Standard Chartered as of [Jan. 29, 2021], emerging markets debt represents an attractive carry opportunity within fixed income,” David I. Robbins, group managing director and portfolio manager at TCW, said.
EFIX invests in debt securities issued or guaranteed by companies, financial institutions and government entities located in emerging market countries. These investments include, but are not limited to, sovereign entities, quasi-sovereign entities and corporations.
In addition to Stanojevic and Robbins, the fund’s portfolio management team from TCW includes Penelope D. Foley, who is a group managing director and portfolio manager for TCW. The portfolio managers are jointly responsible for the day-to-day management of the fund.