Core Insights - The First Trust New York Municipal High Income ETF (FMNY) focuses on New York tax-exempt income by investing at least 80% of net assets in municipal securities exempt from U.S. federal and New York State/City income taxes [1] Investment Strategy - The ETF targets an effective duration of approximately 3–9 years under normal conditions [1] - At least 50% of net assets are allocated to investment-grade bonds, with pre-refunded or escrowed-to-maturity bonds treated as investment grade [1] - The fund limits below-investment-grade exposure to 50%, with a maximum of 10% in distressed municipals [1] Portfolio Characteristics - The fund may include AMT-subject bonds and utilize derivatives, including futures [1] - As a non-diversified fund, issuer weights may be more concentrated compared to broad municipal benchmarks [1] Risk Management - Risk controls are based on credit-quality bands, duration targeting, structural analysis, and adherence to the distressed cap [1]

Fidelity MSCI Real Estate Index ETF (FREL US) – Portfolio Construction MethodologyThe underlying MSCI USA IMI Real Estate 25/25 Index offers full-market-cap coverage of US real estate equities by selecting all GICS Real Estate constituents across large, mid, and small caps from the MSCI USA IMI. Eligibility follows MSCI Global Investable Market Indexes rules, including free-float adjustment, foreign ownership limits, and liquidity/investability thresholds; size segmentation targets ~99% of US free-float mar ...

First Trust S&P REIT Index Fund (FRI US) – Portfolio Construction MethodologyThe underlying S&P United States REIT Index provides float-adjusted market-cap exposure to U.S.-domiciled equity real estate investment trusts, excluding mortgage and hybrid REITs. Eligibility draws from the S&P U.S. BMI real estate universe and applies S&P Global BMI investability screens that typically include minimum float-adjusted market cap ≥ USD 100 million plus 6- and 12-month trading liquidity thresholds and free float requ ...

Core Insights - The Fidelity Investment Grade Securitized ETF (FSEC) aims to generate high current income from investment-grade securitized credit while managing interest-rate and prepayment risks [1] Portfolio Construction Methodology - The portfolio typically holds at least 80% in securitized debt, including agency and non-agency MBS, CMBS, and ABS [1] - The investment strategy utilizes the Bloomberg U.S. Securitized Index to align overall rate risk [1] - Security selection involves cash-flow modeling, option-adjusted spread/convexity analysis, structure and tranche vetting, collateral performance, servicer quality, and relative-value signals across sectors and coupons [1] - Emphasis is placed on sector and structure diversification, liquidity tiers, and risk budgeting for curve, spread, and extension/prepayment exposures [1] - Forward-settling TBAs/dollar rolls and derivatives may be employed to fine-tune duration, basis, and carry [1] - Continuous rebalancing occurs, driven by basis shifts, convexity asymmetry, collateral migration, and price/value gaps; positions are reduced in response to deteriorating credit/structure, adverse seasoning dynamics, or inefficient optionality [1]

Core Viewpoint - The First Trust Short Duration Managed Municipal ETF (FSMB) focuses on U.S. municipal debt to provide federally tax-exempt income while maintaining a short interest-rate profile [1] Group 1: Investment Strategy - The portfolio primarily invests in investment-grade general obligation and revenue bonds, with selective allocations to below-investment-grade issues when credit analysis supports it [1] - Security selection is based on bottom-up fundamental analysis, considering issuers, pledged revenues, covenants, call structures, and use-of-proceeds, while integrating event risk and liquidity assessments at the CUSIP level [1] Group 2: Portfolio Construction - The portfolio aims for a short effective duration with laddered and barbell exposures around refunding cycles and call dates [1] - Issue sizes, state concentrations, and sector weights are managed to control idiosyncratic and geographic risk [1] - Cash and high-quality short municipal bonds are utilized as liquidity buffers [1] Group 3: Rebalancing and Adjustments - Rebalancing and adjustments are made based on relative-value shifts across curves, calls, and credit tiers, or when issuer fundamentals or tax law dynamics change [1]

Core Insights - The Fidelity Sustainable High Yield ETF (FSYD) employs an investment framework focused on USD high-yield corporate bonds, integrating bottom-up credit selection with sustainability criteria to avoid issuers with significant ESG controversies [1] Group 1: Investment Strategy - The ETF targets issuers with improving sustainability practices while avoiding those involved in prohibited activities [1] - Analysts assess business risk, financial policy, cash-flow coverage, asset protection, and covenant strength, including downside recovery analysis and catalysts [1] Group 2: Portfolio Construction - Portfolio construction aims to balance carry with resiliency, diversifying across industries, issuers, and rating buckets [1] - Position sizing is determined by conviction, liquidity, and expected loss, with limits to mitigate single-name and sector concentration [1] Group 3: Risk Management - The management team favors seasoned, covenant-sound bonds and avoids structurally weak structures unless compensation is adequate [1] - Cash and short-duration instruments are utilized to provide flexibility during market dislocations [1] Group 4: Rebalancing Strategy - Rebalancing is conducted to realize relative-value rotations across ratings and maturities, reducing exposure when fundamentals weaken or liquidity risk increases [1]

Fidelity MSCI Consumer Staples Index ETF (FSTA US) – Portfolio Construction MethodologyThe underlying MSCI USA IMI Consumer Staples 25/50 Index provides free float-adjusted exposure to U.S. large-, mid-, and small-cap companies classified in GICS consumer staples. Eligibility follows MSCI’s developed market investability screens, including minimum liquidity of 12- and 3-month ATVR ≥20% and 3-month trading frequency ≥90%, with only one eligible listing used. Constituents and weights start from the MSCI USA I ...

Core Insights - The Fidelity MSCI Information Technology Index ETF (FTEC US) provides exposure to U.S. information technology across large, mid, and small-cap stocks through a float-adjusted, cap-weighted methodology [1] Group 1: Index Construction - The underlying index is the MSCI USA IMI Information Technology 25/50 Index, which follows MSCI's IMI framework for U.S.-domiciled equities classified under GICS Information Technology [1] - The index includes stocks that meet investability tests, such as a minimum free-float market cap of at least 50% of the applicable size-segment cutoff [1] - For stocks with a foreign inclusion factor of less than 0.15, a heightened size test of 1.8 times the minimum is applied [1] Group 2: Liquidity Requirements - Developed-market liquidity criteria include a minimum of 20% 12-month Average Total Volume Ratio (ATVR), 20% 3-month ATVR, and 90% 3-month trading frequency, assessed over the last four consecutive quarters [1] Group 3: Size Segmentation and Weighting - The size segmentation aims for 85% coverage for the Standard index and 99% for the IMI [1] - Constituents are weighted based on float-cap and constrained quarterly by the 25/50 rule, which limits any issuer to a maximum of 25% and the sum of issuers exceeding 5% to a maximum of 50% [1] - Reviews of the index are conducted quarterly, with changes taking effect on the last business day of the review period [1]

First Trust Nasdaq Pharmaceuticals ETF (FTXH US) – Portfolio Construction MethodologyThe underlying Nasdaq US Smart Pharmaceuticals Index targets a concentrated, factor-tilted portfolio of US pharmaceutical companies. The selection universe is US-listed common stocks classified in the pharmaceuticals industry within the Nasdaq US Benchmark Index that meet Nasdaq’s standard free-float and trading-volume investability screens. From this universe, the 30 stocks with the highest three-month average daily tradin ...

Pacer Cash Cows Fund of Funds ETF (HERD US) – Portfolio Construction MethodologyThe underlying Pacer Cash Cows Fund of Funds Index provides rules-based exposure to five Pacer Cash Cows equity ETFs, each linked to a free-cash-flow-yield–focused equity index. At each quarterly rebalance, the index allocates 20% to each ETF: Pacer US Cash Cows 100 (screening the Russell 1000), Pacer US Small Cap Cash Cows 100 (screening the S&P SmallCap 600, whose committee-selected constituents typically span roughly USD 750 ...