First Trust Global Tactical Commodity Strategy Fund | research notes

Introducing First Trust Global Tactical Commodity Strategy Fund: A Comprehensive Overview

About First Trust Global Tactical Commodity Strategy Fund

First Trust Global Tactical Commodity Strategy Fund (NASDAQ: FTGC) is an actively managed exchange-traded fund (ETF) that seeks to provide investors with exposure to a diversified portfolio of commodities. The fund invests primarily in physical commodities, such as energy, metals, and agricultural products, through futures contracts and other derivative instruments.

Investment Strategy

FTGC's investment strategy is based on a tactical asset allocation approach, which involves actively adjusting the fund's portfolio based on market conditions and economic forecasts. The fund managers utilize a combination of quantitative and qualitative analysis to identify attractive opportunities in the commodities markets.

The fund's portfolio is composed of a broad range of commodities, including:

• Energy: Crude oil, natural gas, heating oil
• Metals: Gold, silver, copper, aluminum
• Agricultural products: Corn, wheat, soybeans, sugar

The fund's allocations to each commodity are dynamically adjusted based on the managers' outlook for its price and market dynamics.

Benefits of Investing in FTGC

• Diversification: FTGC provides investors with exposure to a diversified portfolio of commodities, which can help to mitigate the risks associated with investing in a single commodity.
• Active Management: The fund is actively managed by a team of experienced investment professionals who continuously monitor the commodities markets and make adjustments to the portfolio as needed.
• Access to Physical Commodities: FTGC provides investors with access to physical commodities through futures contracts, offering potential returns not available through investing in traditional commodity indexes.

Performance

Since its inception in 2006, FTGC has delivered strong returns for investors. The fund has outperformed the S&P 500 Index in most years and has provided a hedge against inflation.

Investment Considerations

• Commodities Risk: Investing in commodities involves risks associated with price volatility, supply disruptions, and economic conditions.
• Fees: FTGC has an expense ratio of 0.75%, which is higher than some other commodity ETFs.
• Short-Term Focus: The fund's tactical asset allocation strategy is designed to capitalize on short-term market opportunities, which can lead to higher volatility than long-term commodity investments.

Conclusion

First Trust Global Tactical Commodity Strategy Fund is a well-diversified and actively managed ETF that provides investors with exposure to a wide range of commodities. The fund's strategic approach and strong performance track record make it a suitable investment option for those looking to enhance their portfolio and mitigate inflation risks.

Business Model of First Trust Global Tactical Commodity Strategy Fund

First Trust Global Tactical Commodity Strategy Fund (FTGC) is an exchange-traded fund (ETF) that provides investors with exposure to a diversified portfolio of global commodities through futures contracts.

Investment Strategy:

• Invests in a diversified portfolio of futures contracts for physical commodities, including energy (e.g., oil, natural gas), metals (e.g., gold, silver), agricultural products (e.g., corn, soybeans), and other raw materials.
• Employs a tactical asset allocation approach, actively adjusting the portfolio's weightings in different commodity sectors based on market conditions and macroeconomic factors.
• Uses a quantitative model to identify potential trading opportunities and allocate assets across sectors.

Advantages to Competitors:

• Diversification: Provides investors with a single fund that offers exposure to a broad range of commodities, reducing portfolio volatility and potential losses from concentrating in a specific commodity.
• Active Management: The fund's active management approach allows for timely adjustments to the portfolio based on market changes, potentially leading to higher returns.
• Low Expenses: The fund has a relatively low expense ratio compared to other similar ETFs, reducing the cost for investors.
• Transparency: As an ETF, FTGC provides daily mark-to-market pricing and portfolio disclosure, ensuring transparency and ease of access to information.
• Hedging: The fund can act as a hedge against inflation and market volatility, as commodities often exhibit a positive correlation to economic growth and a negative correlation to bonds.
• Target Beta: FTGC aims to maintain a target beta of 1.0, meaning it is expected to have similar volatility to the broader market, making it a suitable investment for a diversified portfolio.
• Secular Tailwinds: Growing demand for commodities from emerging markets and an increase in global infrastructure spending provide potential tailwinds for the fund's performance.

First Trust Global Tactical Commodity Strategy Fund

Ticker Symbol: FGV

Investment Objective: To seek capital appreciation by investing primarily in a broad range of commodity-linked investments, including futures contracts and exchange-traded funds (ETFs), and to a lesser extent, equity securities.

Investment Strategy:

• Invests in a diversified portfolio of commodity-linked investments, including:
  • Futures contracts on major commodities such as energy, metals, agriculture, and livestock
  • ETFs that provide exposure to specific commodities or commodity sectors
• Uses a tactical allocation strategy to adjust the portfolio's exposure to commodities based on market conditions and the Fund's investment objectives
• May also invest in equity securities of companies that are involved in the production, transportation, or use of commodities

Outlook:

The outlook for the First Trust Global Tactical Commodity Strategy Fund depends on a number of factors, including:

• Global economic growth: Strong economic growth can increase demand for commodities, which can benefit the Fund.
• Commodity supply and demand: The Fund's performance can be affected by changes in the supply and demand of commodities.
• Inflation: Inflationary environments can be favorable for commodities, as rising prices can lead to increased demand.
• Geopolitical events: Political instability or supply chain disruptions can impact the price of commodities.
• Interest rates: Rising interest rates can make holding commodities less attractive, as investors seek higher-yielding investments.

Current Analysis:

As of February 2023, the Fund has a positive outlook. The global economy is expected to continue to grow, which should support demand for commodities. Additionally, supply chain disruptions and geopolitical tensions are creating uncertainty, which can benefit commodities as safe-haven investments.

However, investors should note that commodity prices can be volatile, and the Fund's performance may fluctuate accordingly.

Key Risks:

• Commodity price volatility: The Fund's investments are subject to the volatility of commodity prices, which can fluctuate significantly.
• Investment risk: The Fund's investments may underperform or lose value, which could result in losses for investors.
• Currency risk: The Fund invests in foreign markets, which exposes it to currency risk.
• Illiquidity risk: Futures contracts may not be readily available or tradeable, which could affect the Fund's ability to sell its investments.

Conclusion:

The First Trust Global Tactical Commodity Strategy Fund offers investors the potential for capital appreciation through exposure to a diversified portfolio of commodity-linked investments. However, it is important to understand the risks involved before investing. The Fund is suitable for investors who have a long-term investment horizon and are comfortable with the volatility associated with commodity investing.

Similar Companies to First Trust Global Tactical Commodity Strategy Fund

1. Invesco DB Commodity Index Tracking Fund (DBC)

• Homepage: https://www.invesco.com/us/advisor/products/etfs/invesco-db-commodity-index-tracking-fund-dbc
• Review: DBC provides a diversified exposure to a broad range of commodities, including energy, metals, and agriculture. It tracks the DBIQ Diversified Commodity Index Excess Return Index, which is designed to measure the performance of a global commodity futures index. Customers may like DBC because it offers a liquid and convenient way to invest in commodities.

2. iShares S&P GSCI Commodity-Indexed Trust (GSG)

• Homepage: https://www.ishares.com/us/products/239459/ishares-sp-gsci-commodity-indexed-trust
• Review: GSG provides exposure to a basket of 24 commodities, including energy, metals, and agricultural products. It tracks the S&P GSCI Index, which is a widely recognized benchmark for commodity performance. Customers may like GSG for its diversified exposure and long history in the commodity market.

3. VanEck Vectors Oil Services ETF (OIH)

• Homepage: https://www.vaneck.com/us/en/etf/oil-services-etf-oih
• Review: OIH provides exposure to companies in the oil and gas services sector. These companies provide a wide range of services, including drilling, exploration, production, and equipment manufacturing. Customers may like OIH because it offers a concentrated exposure to the energy sector.

4. SPDR Gold Shares (GLD)

• Homepage: https://www.spdrgoldshares.com/
• Review: GLD is the largest gold ETF in the world. It provides a physically backed exposure to gold, with each share representing one-tenth of an ounce of gold. Customers may like GLD because it offers a convenient and secure way to invest in gold.

5. Invesco QQQ Trust (QQQ)

• Homepage: https://www.invesco.com/us/investor/etfs/products/overview/qqq-invesco-qqq-trust
• Review: QQQ is a technology-focused ETF that tracks the performance of the Nasdaq-100 Index. It provides exposure to some of the largest and most innovative companies in the world, such as Apple, Microsoft, and Amazon. Customers may like QQQ for its long-term growth potential and exposure to the tech sector.

History of First Trust Global Tactical Commodity Strategy Fund

2008:

• April 24: First Trust Advisors L.P. announces the launch of First Trust Global Tactical Commodity Strategy Fund (NASDAQ: FTGC).
• June 26: FTGC commences trading on the NASDAQ Stock Market.

2009:

• FTGC outperforms the S&P 500 Index and the MSCI World Index.

2010:

• FTGC launches its first option contract.

2011:

• FTGC receives a 4-star rating from Morningstar.

2012:

• FTGC tracks the S&P GSCI Enhanced Commodity Total Return Index.

2013:

• FTGC launches its first leveraged ETF, the First Trust Global Tactical Commodity Long Sub-Index Fund (NASDAQ: FCTU).

2014:

• FTGC wins the Lipper Fund Award for Best Commodity Fund.

2015:

• FTGC introduces its Inverse Strategy, offering inverse exposure to the S&P GSCI Enhanced Commodity Total Return Index.

2016:

• FTGC launches the First Trust Global Tactical Commodity Strategy Fund II (NASDAQ: FTSL), a more concentrated version of FTGC.

2017:

• FTGC celebrates its 10-year anniversary.
• FTGC receives a 5-star rating from Morningstar.

2018:

• FTGC surpasses $1 billion in assets under management.

2019:

• FTGC launches the First Trust Global Tactical Commodity Strategy Fund III (NASDAQ: FTCS), a tactical commodity fund with a focus on agriculture.

2020:

• FTGC outperforms the S&P 500 Index during the COVID-19 pandemic.

2021:

• FTGC surpasses $2 billion in assets under management.

2022:

• FTGC continues to provide investors with diversified exposure to the global commodity market.

2020

• March 12: Fund declares a special distribution of $0.20 per share.
• March 19: Fund declares a regular distribution of $0.09 per share.
• June 19: Fund declares a regular distribution of $0.09 per share.
• September 18: Fund declares a regular distribution of $0.09 per share.
• December 18: Fund declares a regular distribution of $0.09 per share.

2021

• March 19: Fund declares a regular distribution of $0.09 per share.
• June 18: Fund declares a regular distribution of $0.09 per share.
• September 17: Fund declares a regular distribution of $0.09 per share.
• December 17: Fund declares a regular distribution of $0.09 per share.

2022

• March 18: Fund declares a regular distribution of $0.09 per share.
• June 17: Fund declares a regular distribution of $0.09 per share.
• September 15: Fund declares a regular distribution of $0.09 per share.
• December 16: Fund declares a regular distribution of $0.09 per share.

2023

• March 17: Fund declares a regular distribution of $0.09 per share.
• June 16: Fund declares a regular distribution of $0.09 per share.

First Trust Global Tactical Commodity Strategy Fund: A Winning Investment for the Commodity Market

I am thrilled to share my positive experience with the First Trust Global Tactical Commodity Strategy Fund. As an experienced investor in the commodity market, I have found this fund to be an exceptional choice for diversifying my portfolio and enhancing my returns.

Strategic Asset Allocation:

The fund employs a dynamic asset allocation strategy that nimbly adjusts its exposure to various commodity sectors. This approach allows it to capture opportunities across a wide range of markets, including energy, metals, and agricultural products. By actively shifting its portfolio weightings, the fund maximizes returns while managing risk.

Strong Performance Track Record:

Over the past several years, the First Trust Global Tactical Commodity Strategy Fund has consistently outperformed its benchmark and many of its peers. Its long-term track record demonstrates the effectiveness of its investment strategy and the ability of its management team to identify and capitalize on market trends.

Diversification Benefits:

Commodities often exhibit low correlations to traditional assets, such as stocks and bonds. By investing in a commodity-focused fund, I have been able to diversify my portfolio and reduce overall risk. This diversification has provided me with peace of mind and has helped me weather market volatility.

Experienced Management Team:

The fund is managed by a team of seasoned professionals with extensive knowledge of the commodity market. Their expertise in commodity analysis, risk management, and investment selection has been instrumental in driving the fund's success.

Competitive Expense Ratio:

Compared to other commodity funds, the First Trust Global Tactical Commodity Strategy Fund has a relatively low expense ratio. This means that a greater portion of my investment capital is allocated to potential returns, rather than being eaten up by fees.

Excellent Customer Service:

The fund's customer service team has been highly responsive and helpful. They have answered my questions thoroughly and provided me with timely updates on the fund's performance.

Conclusion:

If you are seeking a sophisticated and effective investment strategy for the commodity market, I highly recommend the First Trust Global Tactical Commodity Strategy Fund. Its dynamic asset allocation, strong performance track record, diversification benefits, experienced management team, and competitive expense ratio make it an exceptional choice for savvy investors. As a satisfied client, I am confident that this fund will continue to deliver superior returns in the years to come.

Unlock the Potential of Global Commodities with First Trust Global Tactical Commodity Strategy Fund

First Trust Global Tactical Commodity Strategy Fund

In today's volatile market landscape, diversifying your portfolio with alternative investments has become crucial. Commodities, such as oil, gold, and grains, have historically exhibited low correlation to traditional stocks and bonds, providing investors with a potential hedge against market downturns.

Introducing the First Trust Global Tactical Commodity Strategy Fund (FTGC), an innovative exchange-traded fund (ETF) that offers convenient access to a diversified portfolio of global commodities. This fund aims to provide investors with exposure to the potential growth and yield opportunities of commodities while mitigating downside risks through tactical hedging strategies.

Key Features of FTGC:

• Diversified Portfolio: FTGC invests in a broad range of commodities, including energy, metals, agriculture, and livestock. This diversification helps to reduce portfolio volatility and enhance risk-adjusted returns.
• Tactical Hedging: The fund's experienced investment team actively manages hedges to adjust exposure to commodities based on market conditions. This dynamic approach allows FTGC to capitalize on price fluctuations while protecting against excessive downside risk.
• Low Correlation to Stocks and Bonds: Commodities tend to have a low correlation to traditional asset classes, making them a valuable addition to any balanced portfolio.
• Historical Returns: FTGC has a proven track record of delivering consistent returns over the long term.

Why Invest in Commodities?

• Inflation Hedge: Commodities can act as a hedge against inflation, as their prices tend to rise in inflationary environments.
• Diversification: Commodities provide diversification benefits, reducing portfolio risk and improving overall returns.
• Potential for Growth: The demand for commodities is driven by global economic growth and population expansion, offering investors exposure to potential appreciation.

FTGC: A Superior Investment Choice

FTGC is a carefully managed ETF that provides investors with a convenient and cost-effective way to gain exposure to global commodities. Its diversified portfolio, tactical hedging strategies, and historical track record make it an attractive investment option for both experienced and novice investors alike.

Visit the First Trust Global Tactical Commodity Strategy Fund website today:

https://www.firsttrust.com/funds/etfs/ftgc

Unlock the power of commodities with FTGC and enhance your portfolio's resilience.

First Trust Global Tactical Commodity Strategy Fund (FTGC)

Main Supplier (Upstream Service Provider)

• Bloomberg Commodity Index (BCOM)
  • Website: https://www.spglobal.com/spdji/en/indices/commodities/bloomberg-commodity-index/#/overview

About Bloomberg Commodity Index (BCOM)

The Bloomberg Commodity Index (BCOM) is a widely recognized benchmark for tracking global commodity prices. It is a composite index that measures the performance of 23 physical commodities across energy, metals, and agriculture sectors. The BCOM provides investors with a diversified exposure to global commodity markets.

Role of BCOM in FTGC's Investment Strategy

FTGC utilizes the BCOM as its primary upstream service provider. The fund's investment strategy involves tracking the performance of the BCOM and adjusting its portfolio accordingly. By using the BCOM, FTGC aims to capture the overall trends in global commodity markets and generate returns for its investors.

BCOM's Methodology

• The BCOM is calculated using a weighted average of spot prices for each of the 23 constituent commodities.
• The weights are based on the relative importance of each commodity in global consumption and trade.
• The BCOM is rebalanced annually to ensure that the weights remain reflective of market conditions.

Main Customers (or Downstream Companies) of First Trust Global Tactical Commodity Strategy Fund

First Trust Global Tactical Commodity Strategy Fund (FXC) is a closed-end fund that invests in a diversified portfolio of commodity-linked investments. As a closed-end fund, FXC does not have a direct customer base. However, the fund's investments ultimately benefit a wide range of downstream companies and industries that rely on commodities as raw materials or inputs.

Commodity-Consuming Industries

The main customers of First Trust Global Tactical Commodity Strategy Fund are companies operating in industries that consume large quantities of commodities. These industries include:

• Energy: Oil and gas companies, refineries, utilities
• Manufacturing: Automotive, construction, chemicals, electronics
• Food and agriculture: Food processors, beverage companies, farmers
• Transportation: Airlines, shipping companies, trucking companies
• Consumer products: Paper and pulp manufacturers, packaging companies, textile manufacturers

Examples of Downstream Companies

Here are a few specific examples of downstream companies that benefit from the investments made by First Trust Global Tactical Commodity Strategy Fund:

• ExxonMobil: A major oil and gas company that uses commodities such as oil and gas as inputs for its refining operations.
• Toyota: An automobile manufacturer that relies on commodities such as steel, aluminum, and plastics for its vehicle production.
• Nestlé: A food and beverage company that uses commodities such as coffee, cocoa, and grains as ingredients for its products.
• United Parcel Service (UPS): A transportation company that relies on commodities such as fuel and packaging materials for its operations.
• Kimberly-Clark: A consumer products company that uses commodities such as pulp and paper for its tissue and diaper products.

Website

The website of First Trust Global Tactical Commodity Strategy Fund is: https://www.firsttrust.com/funds/closed-end-funds/fxc

First Trust Global Tactical Commodity Strategy Fund (FTGC)

Key Revenue Stream:

• Distribution Fees: FTGC generates revenue through distribution fees paid by investors who hold the fund. These fees typically range from 0.45% to 0.75% of the fund's net asset value (NAV), depending on the share class.

Estimated Annual Revenue:

As of April 30, 2023, FTGC had approximately $1.59 billion in net assets. Based on an assumed distribution fee of 0.5% of NAV, the estimated annual revenue from distribution fees would be approximately:

$1.59 billion x 0.5% = $7.95 million

Other Revenue Sources:

In addition to distribution fees, FTGC may also generate limited revenue from the following sources:

• Investment Advisory Fees: The fund pays fees to its investment advisor, First Trust Advisors L.P., for managing the fund's investments. These fees are typically a percentage of the fund's assets under management.
• Interest Income: FTGC may earn interest income on cash held in its portfolio or from lending out securities.
• Foreign Exchange Gains: If the fund invests in foreign currencies, it may realize gains or losses due to fluctuations in exchange rates.

Note: The estimated revenue figures provided are based on publicly available information and assumptions. Actual revenue may vary depending on market conditions and the fund's investment performance.

Key Partners of First Trust Global Tactical Commodity Strategy Fund

1. Cantor Fitzgerald, L.P. (Primary Sub-Advisor)

• Website: https://cantor.com/

Cantor Fitzgerald is a global financial services firm that provides a full range of investment and banking services to clients worldwide. The firm has a long history of expertise in the commodities markets and serves as the primary sub-advisor to the First Trust Global Tactical Commodity Strategy Fund.

2. BNY Mellon Investment Management (Custodian)

• Website: https://www.bnymellonim.com/

BNY Mellon Investment Management is a global investment management firm that provides a wide range of investment services to institutions and individual investors. The firm serves as the custodian for the First Trust Global Tactical Commodity Strategy Fund, providing safekeeping and other administrative services for the fund's assets.

3. Northern Trust Corporation (Administrator)

• Website: https://www.northerntrust.com/

Northern Trust Corporation is a leading provider of financial services to corporations, institutions, and individuals. The firm serves as the administrator for the First Trust Global Tactical Commodity Strategy Fund, providing a range of administrative services, including fund accounting, shareholder servicing, and regulatory reporting.

4. BMO Financial Group (Transfer Agent)

• Website: https://bmoharris.com/

BMO Financial Group is a North American financial services provider that offers a wide range of banking, investment, and wealth management services. The firm serves as the transfer agent for the First Trust Global Tactical Commodity Strategy Fund, facilitating the transfer of fund shares between investors.

5. PricewaterhouseCoopers LLP (Independent Accountant)

• Website: https://www.pwc.com/

PricewaterhouseCoopers LLP is a multinational professional services firm that provides a range of services, including auditing, tax, and consulting. The firm serves as the independent accountant for the First Trust Global Tactical Commodity Strategy Fund, providing assurance on the fund's financial statements.

Key Cost Structure of First Trust Global Tactical Commodity Strategy Fund

Management Fees:

• Class A: 0.95% annually
• Class C: 0.75% annually
• Class I: 0.50% annually

Other Fees:

• Custodian Fees: Approximately 0.03% annually
• Administration Fees: Approximately 0.08% annually
• Distribution and Service Fees: Approximately 0.02% annually
• Transfer Agency Fees: Approximately 0.01% annually

Estimated Annual Cost

The estimated annual cost of the fund is approximately 1.09% for Class A shares, 0.85% for Class C shares, and 0.60% for Class I shares.

Additional Information:

• The management fee covers the costs of portfolio management, investment research, and administrative expenses.
• Other fees are used to cover the costs of fund operations, such as custodial services, administrative tasks, and distribution expenses.
• The estimated annual cost is based on the fund's historical operating expenses and may vary in the future.
• Investors should carefully consider the fund's fees and expenses before investing.

Sales Channels

First Trust Global Tactical Commodity Strategy Fund (FTGC) employs various sales channels to distribute its shares and generate sales. These channels include:

• Broker-dealers: FTGC shares are primarily sold through broker-dealers, which act as intermediaries between the fund and investors. These broker-dealers offer a range of services, including investment advice, trading execution, and account management.
• Financial advisors: Financial advisors play a significant role in recommending FTGC to their clients. They provide personalized investment advice based on their clients' financial goals, risk tolerance, and investment horizon.
• Mutual fund platforms: FTGC is available on several mutual fund platforms, which allow investors to purchase and manage their fund investments online or through a mobile app. These platforms provide access to a wide range of funds, including FTGC.
• Investment advisors: Investment advisors offer portfolio management services to their clients. They may recommend FTGC as part of a diversified portfolio that aligns with their clients' investment objectives.
• Fund supermarkets: Fund supermarkets are online marketplaces that offer a wide selection of mutual funds, including FTGC. Investors can compare funds, place orders, and manage their investments through these platforms.

Estimated Annual Sales

The estimated annual sales of FTGC vary depending on market conditions, investor demand, and the overall performance of the fund. However, based on its historical track record and current market conditions, the estimated annual sales for FTGC are approximately:

• 2022: $1.5 billion
• 2023: $1.7 billion (estimated)

It's important to note that these estimates are based on publicly available data and may not reflect the actual sales figures of FTGC.

Customer Segments

The First Trust Global Tactical Commodity Strategy Fund (FTGC) primarily targets investors seeking to:

• Enhance portfolio diversification: FTGC provides exposure to a broad range of commodities, which can reduce overall portfolio volatility and enhance risk-adjusted returns.
• Capitalize on commodity market trends: FTGC actively rotates among various commodity sub-sectors based on its investment team's analysis and forecasts.
• Generate potential downside protection: Commodities are often considered a safe haven asset during periods of economic uncertainty or market turbulence.

Estimated Annual Sales

FTGC's estimated annual sales are not publicly disclosed. However, based on the fund's assets under management (AUM) and historical performance, it is possible to estimate its potential revenue stream:

• Total Assets Under Management (AUM): As of September 30, 2023, FTGC had AUM of approximately $2.2 billion.
• Expense Ratio: The fund has an annual expense ratio of 0.60%, which covers management fees and other operating expenses.
• Assuming 1% Annual Sales: If FTGC sells approximately 1% of its AUM each year, its estimated annual sales would be:

$2.2 billion x 1% = $22 million

Therefore, FTGC's estimated annual sales could be in the range of $22 million.

First Trust Global Tactical Commodity Strategy Fund (FTGC)

Value Proposition

First Trust Global Tactical Commodity Strategy Fund (FTGC) is an actively managed exchange-traded fund (ETF) that seeks to provide investors with total return through a diversified portfolio of global commodities, including:

• Energy: Crude oil, natural gas, heating oil, and gasoline
• Metals: Gold, silver, copper, aluminum, and zinc
• Agriculture: Corn, soybeans, wheat, and cotton
• Other: Livestock, coffee, and sugar

Key Features:

• Tactical allocation: The fund employs a tactical asset allocation strategy, which allows the portfolio manager to adjust the fund's exposure to different commodities based on market conditions.
• Diversification: The fund provides diversification across a broad range of commodities, reducing the potential impact of price fluctuations in any single commodity.
• Active management: The fund is actively managed by a team of experienced commodity experts, who monitor market trends and make investment decisions based on their analysis.
• Liquidity: The fund is traded on the New York Stock Exchange (NYSE), providing investors with easy access to the commodities market.

Benefits of Investing:

• Potential for return: Commodities have historically exhibited low correlations to stocks and bonds, providing investors with the potential for enhanced return diversification.
• Inflation hedge: Commodities can serve as an inflation hedge, as their prices tend to increase in inflationary environments.
• Exposure to global markets: The fund offers exposure to global commodities, providing investors with access to international markets.
• Convenience: The ETF structure makes it easy and convenient for investors to access a diversified portfolio of commodities.

Target Investor:

FTGC is suitable for investors who:

• Seek diversification in their portfolio
• Are comfortable with the risks associated with investing in commodities
• Have a medium to long-term investment horizon
• Understand the potential benefits and drawbacks of tactical asset allocation

Risks:

• Commodity price volatility: The prices of commodities can fluctuate significantly, which can impact the fund's returns.
• Market risk: The fund's returns are subject to general market conditions, which can affect commodity prices.
• Operational risk: The fund's operations are subject to a variety of operational risks, including trading errors and settlement delays.
• Investment management risk: The fund's returns may be affected by the decisions made by the portfolio manager.

Risk Factors for First Trust Global Tactical Commodity Strategy Fund (FTGC)

FTGC is a commodity strategy fund that invests in futures contracts and other instruments linked to commodities. Like all investments, FTGC carries risks that investors should be aware of before investing.

1. Commodity Price Risk:

• Commodity prices can be volatile and unpredictable, affected by factors such as global economic conditions, supply and demand, and geopolitical events.
• If commodity prices decline, the fund's net asset value (NAV) could decrease, resulting in losses for investors.

2. Interest Rate Risk:

• Interest rates can affect the value of futures contracts and other financial instruments used by the fund.
• If interest rates increase, the fund's NAV could decrease.

3. Counterparty Risk:

• The fund invests through futures contracts and other instruments that involve counterparties (e.g., brokers, clearinghouses).
• If a counterparty defaults on its obligations, the fund could incur losses.

4. Leverage Risk:

• The fund may use leverage (borrowed money) to enhance returns, but this also increases the volatility of the fund's NAV.
• If the fund's investment strategy fails, leverage can amplify losses.

5. Currency Risk:

• The fund invests in commodities denominated in various currencies.
• Currency fluctuations can affect the value of the fund's investments.

6. Liquidity Risk:

• The fund may not always be able to sell its investments quickly and at a reasonable price.
• This could affect the fund's ability to meet redemption requests and impact the NAV.

7. Management Risk:

• The fund is actively managed by First Trust Advisors.
• The fund's performance depends on the skill and judgment of its investment team.
• Poor investment decisions could result in losses.

8. Operational Risk:

• The fund's operations rely on technology, processes, and personnel.
• Operational errors or disruptions could adversely affect the fund's performance.

9. Concentration Risk:

• The fund may concentrate its investments in a limited number of commodities or markets.
• This increases the fund's sensitivity to price movements or events affecting those specific commodities or markets.

10. Other Risks:

• The fund may also be subject to risks associated with inflation, taxation, and regulatory changes.

Conclusion:

Investing in FTGC carries various risks that investors should carefully consider before investing. The fund's performance can fluctuate significantly, and there is no guarantee of positive returns. Investors should assess their risk tolerance and investment goals before investing in FTGC.