When it comes to its line of top-performing exchange traded funds
appears to be operating under the philosophy of "slow and steady
wins the race." And it's paying off.
At the end of 2008, First Trust had $800 million in assets under
management and was one of the smaller ETF providers. Those days are
a distant memory: At the end of April 2010, the provider boasted
$3.1 billion in assets under management and is now just outside the
industry's top 10 list.
If the provider's funds continue to reside near the top of
performance charts, top 10 may not be far off. ETFs like
KEYnotes First Trust Enhanced 130/30 Large-Cap ETN
First Trust NYSE Arca Biotech Index (NYSEArca:
are some of the provider's top-performing funds year-to-date. FBT,
in fact, leads all other biotechnology ETFs, up 14.8% year-to-date.
April ETF Industry Assets.
The Firm's History
First Trust is not a newcomer to the investment world. The
company was established in 1991, getting its start as a unit
investment trust (
) sponsor and spent most of its first decade doing that, according
to Dan Waldron, First Trust's head of ETFs.
"In the last five or six years, we started to expand
aggressively into other types of products," he says, including ETFs
in 2005. Waldron says that the first ETF was more of a "testing of
the waters," and that a full play for the ETF market was made by
First Trust in 2007. Today, they have 43 ETFs. [
Our April ETF Performance Report.
Standing Out in the Crowd
"If there's a word to describe the ETF market," Waldron says,
Since entering the business, the iShares and State Streets of
the world have become fully entrenched in the ETF market space. As
new players enter, they're staking out their own corners of the
market and that's what First Trust is doing. [
ETF Providers: Who's Who?
"We're trying to find our own beachhead and we believe in the
core domestic categories for alpha," he says. "We sort of jumped
the curve and jumped right into alpha looking at things like
large-cap core and small-cap core."
Waldron admits feeling frustration as other "hot" concepts like
emerging markets and leveraged and inverse funds took huge inflows,
but sticking to what they do best - domestic equities - has finally
"We feel completely vindicated. The headwinds have turned into
tailwinds and the performance of domestic equities has turned
around," he says. "We feel good about our position in the
Some of First Trust's biggest ETFs are:
First Trust ISE-Revere Natural Gas Index (NYSEArca:
First Trust NASDAQ -100 Tech Index (NASDAQ:
First Trust ISE Chindia Index (NYSEArca:
First Trust Materials AlphaDEX (NYSEArca:
First Trust Financials AlphaDEX (NYSEArca:
To read more interviews with other ETF industry leaders,
visit our interviews page