First Trust's new Managed Municipal ETF to begin trading May 15

By Toni Weeks

San Luis Obispo, Calif., May 7 - First Trust Advisors LP said that shares of its new municipal fund, the First Trust Managed Municipal ETF, a series of First Trust Exchange-Traded Fund III, will begin trading on the Nasdaq on May 15. The ticker symbol will be "FMB."

As previously reported, the exchange-traded fund seeks to generate current income that is exempt from regular federal income taxes, and its secondary objective is long-term capital appreciation. Under normal market conditions, it invests at least 80% of its net assets, including investment borrowings, in municipal debt securities that pay interest exempt from regular federal income taxes. The fund invests at least 65% of its net assets in investment-grade securities.

According to a press release, recent tax increases have boosted the demand for tax-exempt investments. At the same time, some municipalities have been facing increasing economic challenges, raising the importance of active credit analysis and municipal bond expertise, which the fund will benefit from.

The fund's portfolio management team, Tom Futrell and Johnathan N. Wilhelm, sees "ample opportunities" in municipal bonds, the release said. In the team's opinion, credit fundamentals are improving for many municipal bond issuers, and taxable equivalent yields are attractive relative to other fixed-income assets. Given the potential for rising interest rates as a result of stronger economic growth, the team believes that positioning the fund along the intermediate portion of the yield curve, coupled with including bonds with lower investment-grade ratings, provides investors less interest-rate sensitivity than longer-duration portfolios.

There are no shareholder fees. Total annual fund operating expenses will be 0.65% and consist solely of a 0.65% management fee.

Wheaton, Ill.-based First Trust Advisors LP is the investment adviser.

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