FTLS ETF

I'm looking into ETFs to create a balanced portfolio and came across First Trust Long/Short Equity (FTLS) as a good option for hedging. While hedging might reduce potential returns, it enhances risk management, which is ideal for cautious investors like myself. FTLS performs well in managing risk, surpassing the Credit Suisse Hedge Index in all risk measures, even though its overall returns are lower than those of SPY.

First Trust Long/Short Equity ETF offers a long/short strategy to lower long exposure and playoff long/short spreads. The FTLS ETF blends quantitative and fundamental analysis to determine net exposure, with a focus on risk management and the Earnings Quality Rank model. FTLS has a Tech-heavy long position, minimal Tech exposure in a short book, and outperforms peer alternative strategies like IQ Hedge Multi-Strategy Tracker ETF.

The First Trust Long/Short Equity ETF utilizes earnings quality as a key factor in selecting stocks for both long and short positions. FTLS has achieved performance similar to hedge funds while charging fees comparable to mutual funds. In a market environment characterized by rising interest rates, companies with strong earnings momentum are significantly outperforming those with weaker earnings, which is advantageous for FTLS.

First Trust Long/Short Equity ETF is a unique investment vehicle that aims to provide long-term total returns with less volatility than the S&P 500 index. FTLS has historically outperformed during bear markets and has a low standard deviation compared to the S&P 500 and a higher Sharpe ratio. The fund has delivered an 11.5% return this year and has shown the ability to mitigate drawdowns while capturing upside potential.