First Trust to Launch the First Trust IPOX® Europe Equity Opportunities ETF
First Trust Advisors L.P. (“First Trust”), a leading exchange-traded fund (“ETF”) provider and asset manager, announced today that it expects to launch a new ETF, the First Trust IPOX® Europe Equity Opportunities ETF (NASDAQ Global: FPXE) (the “fund”), on October 5, 2018. The fund seeks investment results that correspond generally to the price and yield (before the fund’s fees and expenses) of an equity index called the IPOX® 100 Europe Index (the “index”). The index is a market-cap weighted portfolio measuring the performance of the 100 largest and typically most liquid initial public offerings (“IPOs”) (including spin-offs and equity carve-outs) of companies that are economically tied to Europe, ranked quarterly by market capitalization, in the IPOX® Global Composite Index.
The fund allows investors to gain exposure to the largest and most liquid European-domiciled IPOs and spin-offs without the single stock risk of trying to pick which IPOs will be successful. “Exposure to the IPOX 100®Europe Index provides investors with a diversified, one stop solution to access the performance of European new listings, an economically significant group of companies which often serve as a proxy for European economic growth and innovation,” said Dr. Josef Schuster, CEO of IPOX®Schuster LLC, the developer and provider of the index. “I believe that this unique investment approach will benefit investors seeking equity exposure outside the traditional European benchmarks,” said Dr. Schuster.
Because the fund will only own recent IPOs and spin-offs, there will be very little overlap with traditional index funds, which generally have a waiting period before adding them. “Recent IPOs and spin-offs represent an important segment of the European stock market that is often absent from other European focused index ETFs. This fund provides a unique strategy for investors to gain exposure to the innovation and growth of these stocks before many are added to broad index funds,” said Ryan Issakainen, CFA, Senior Vice President, Exchange-Traded Fund Strategist at First Trust.
For more information about First Trust, please contact Ryan Issakainen at (630) 765-8689 or RIssakainen@FTAdvisors.com.
About First Trust
First Trust is a federally registered investment advisor and serves as the fund’s investment advisor. First Trust and its affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately held companies that provide a variety of investment services. First Trust has collective assets under management or supervision of approximately $134 billion as of August 31, 2018 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts. First Trust is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. First Trust and FTP are based in Wheaton, Illinois. For more information, visit http://www.ftportfolios.com.
You should consider the fund’s investment objectives, risks, and charges and expenses carefully before investing. Contact First Trust Portfolios L.P. at 1-800-621-1675 or visit www.ftportfolios.com to obtain a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.
The fund will list and principally trade its shares on The Nasdaq Stock Market LLC.
The fund’s return may not match the return of the IPOX® 100 Europe Index. Securities held by the fund will generally not be bought or sold in response to market fluctuations.
Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Market prices may differ to some degree from the net asset value of the shares. Investors who sell fund shares may receive less than the share’s net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, unlike mutual funds, shares may only be redeemed directly from the fund by authorized participants, in very large creation/redemption units. If the fund’s authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a discount to the fund’s net asset value and possibly face delisting.
The fund’s shares will change in value, and you could lose money by investing in the fund. One of the principal risks of investing in the fund is market risk. Market risk is the risk that a particular stock owned by the fund, fund shares or stocks in general may fall in value. There can be no assurance that the fund’s investment objective will be achieved.
The fund may invest in securities issued by companies concentrated in a particular industry, sector, or country, which involves additional risks, including limited diversification. The fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.
An investment in a fund containing securities of non-U.S. issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers. These risks may be heightened for securities of companies located in, or with significant operations in, emerging market countries. The fund may invest in depositary receipts which may be less liquid than the underlying shares in their primary trading market.
The fund is subject to greater risks of adverse events which occur in the European region and may experience greater volatility than a fund that is more broadly diversified geographically. A significant number of countries in Europe are member states in the European Union, and the member states no longer control their own monetary policies. In these member states, the authority to direct monetary policies, including money supply and official interest rates for the Euro, is exercised by the European Central Bank. The United Kingdom’s referendum on June 23, 2016 to leave the European Union (known as “Brexit”) sparked depreciation in the value of the British pound, short-term declines in the stock markets and heightened risk of continued economic volatility worldwide.
The stocks of companies that have recently conducted an initial public offering are often subject to price volatility and speculative trading. These stocks may have exhibited above-average price appreciation in connection with the initial public offering prior to inclusion in the fund. The price of stocks included in the fund may not continue to appreciate and their performance may not replicate the performance exhibited in the past.
As the use of Internet technology has become more prevalent in the course of business, the fund has become more susceptible to potential operational risks through breaches in cyber security.
Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of the fund’s investments and the value of fund shares.
The fund currently has fewer assets than larger funds, and like other relatively new funds, large inflows and outflows may impact the fund’s market exposure for limited periods of time.
The fund is classified as “non-diversified” and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.
First Trust Advisors L.P. is the adviser to the fund. First Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P., the fund’s distributor.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA and the Internal Revenue Code. First Trust has no knowledge of and has not been provided any information regarding any investor. Financial advisors must determine whether particular investments are appropriate for their clients. First Trust believes the financial advisor is a fiduciary, is capable of evaluating investment risks independently and is responsible for exercising independent judgment with respect to its retirement plan clients.
A patent with respect to the IPOX® index methodology has been issued (U.S. Pat. No. 7,698,197). IPOX® is a registered international trademark of IPOX® Schuster LLC (www.ipoxschuster.com).