(AFSM) First Trust Active Factor - Ratings and Ratios

The First Trust Active Factor Small Cap ETF (AFSM) is an actively managed exchange-traded fund that focuses on investing in small-cap U.S. equities. Under normal market conditions, the fund allocates at least 80% of its net assets to equity securities of small-cap companies listed in the U.S., with market capitalizations ranging from $250 million to the maximum market capitalization of a widely recognized small-cap index at the time of investment.

The funds investment strategy is centered around identifying undervalued small-cap companies with potential for growth. By leveraging an active management approach, the funds manager seeks to capitalize on market inefficiencies and exploit opportunities that may arise from mispricing in the small-cap segment.

From a technical analysis perspective, the current price of AFSM is $29.46, indicating a bullish trend as it is above its 20-day Simple Moving Average (SMA) of $28.38 and 50-day SMA of $27.63. However, being below its 200-day SMA of $29.68 may signal a potential resistance level. The Average True Range (ATR) of 0.56, or 1.90%, suggests moderate volatility. Given these indicators, a potential trading strategy could involve monitoring the funds ability to break through the 200-day SMA resistance and sustain a move above $30.

Fundamentally, the funds Assets Under Management (AUM) stand at $32.49 million, indicating a relatively modest size. While this could be a constraint for some investors, it also suggests that the fund is still in its growth phase and potentially more agile in responding to market opportunities.

Forecasting the future performance of AFSM involves analyzing both its technical and fundamental data. Given its current technical indicators and the overall trend in small-cap stocks, if AFSM can break through the $30 level and sustain it, there is potential for further upside, potentially targeting the 52-week high of $33.11. Conversely, failure to break through the 200-day SMA could lead to a pullback towards the $28 support level. Fundamentally, the small-cap segment is poised for growth if economic conditions remain favorable, which could bode well for AFSM. Therefore, a potential strategy could be to monitor economic indicators and small-cap market trends while keeping a close eye on AFSMs technical levels.