First Trust (company)

Last updated

First Trust
FormerlyNike Securities
Company type Private
Industry Financial services
PredecessorClayton Brown & Associates
FoundedSeptember 1991;32 years ago (1991-09)
Founder Robert Van Kampen
Headquarters Wheaton, Illinois, U.S.
Key people
Products
AUM US$195 billion (September 2023)
Number of employees
637 (2023)
Website www.ftportfolios.com
Footnotes /references
[1]

First Trust is an American financial services firm based in Wheaton, Illinois. The firm is primarily engaged in issuing exchange-traded fund (ETF) products. However, it is also involved with other products such as unit investment trusts (UIT), mutual funds, and separately managed accounts for institutional investors.

Contents

First Trust was one of the first ETF providers to offer smart beta funds and thematic ETFs. Despite being one of the largest ETF issuers as well as UIT issuers, the firm has maintained a low profile. [2] [3]

Background

In 1967, Robert Van Kampen, who had previously worked at Nuveen, co-founded an investment banking firm, Van Kampen, Wauterlek & Brown, which was later renamed to Clayton Brown & Associates. In 1974, he left the firm to found another firm, Van Kampen Merritt, that was later acquired by Xerox in 1984. [4] [5] [6] [7]

In September 1991, Van Kampen founded another firm named Nike Securities in Chicago after Xerox announced it would discontinue its investment banking business to focus on asset management products such as UITs. Nike Securities acquired the UIT business from Clayton Brown & Associates and added 40-50 employees. At the time, Clayton Brown & Associates had sponsored more than $6 billion of UIT under the First Trust name, and the UIT division accounted for 30% of its business. James Bowen, who was previously the head of the UIT division, was selected to head up the new operation at Nike Securities. [4] [5] [6] [7]

On October 29, 1999, Van Kampen died, leaving speculation on whether his family would consider selling or entering a strategic alliance regarding Nike Securities. At that time, Nike Securities sold over $5 billion annually in UITs and administered $15.2 billion in UIT assets. With a pretax profit of $9 million, it was estimated Nike could fetch $45 million to $63 million in a sale. [7]

Nike Securities was later rebranded to First Trust, the brand name under which its UIT products were sold. [4] [5]

In December 2006, First Trust launched the First Trust Value Line Dividend Index on the American Stock Exchange which was the first closed-end fund to convert to an ETF. [8]

In 2010, Bowen bought First Trust from Van Kampen's family, making him the firm's owner. [2] [3] [4] [9]

In the first quarter of 2013, First Trust entered the European ETF market by launching three smart beta ETFs. [10]

According to The Wall Street Journal in 2019, First Trust is the sixth largest employer of Wheaton is one of the top three employers of Wheaton College graduates. [4]

First Trust's success in the ETF business is due to several factors. It tends to ignore fee wars and charges higher fees compared to its peers. The firm has been noted to offer unique strategies in its product lineup that cannot be found elsewhere. First Trust also focuses on the retail advisor market and relies on strong relationships with investment advisors to sell the products to the clients. It does not offer Robo-advisor services. [2] [3] [9]

Controversial tweets by First Trust executives

Business Insider has reported that First Trust's executives have posted controversial comments on Twitter under their real names and titles. Chief economist Brian Wesbury tweeted that COVID-19 vaccine mandates were similar to slavery, George Floyd protests were riots done by thugs, and that every clerk should be fired as a result of the leak regarding Supreme Court overturning Roe v. Wade . Deputy chief economist Bob Stein stated the George Floyd protests should be described as pogroms and tweeted at the New York Yankees Twitter account to mock it for tweeting facts about gun violence after the 2022 Buffalo shooting. Although both did get temporarily suspended from Twitter, they did not seem to get in trouble with the company or its clients. It was speculated that they evaded more blowback since First Trust is a private company. In 2017, Bowen told the audience at the Fearless Investing Summit that his company was "privately held, so if you hate me, I could care less." [3]

Related Research Articles

Passive management is an investing strategy that tracks a market-weighted index or portfolio. Passive management is most common on the equity market, where index funds track a stock market index, but it is becoming more common in other investment types, including bonds, commodities and hedge funds.

<span class="mw-page-title-main">State Street Corporation</span> Global financial services company

State Street Corporation, is a global financial services and bank holding company headquartered at One Congress Street in Boston with operations worldwide. It is the second-oldest continually operating United States bank; its predecessor, Union Bank, was founded in 1792. State Street is ranked 14th on the list of largest banks in the United States by assets. It is one of the largest asset management companies in the world with US$3.7 trillion under management and US$40.0 trillion under custody and administration in 2023. It is the largest custodian bank in the world, providing securities services and it is considered a systemically important bank by the Financial Stability Board. Along with BlackRock and Vanguard, State Street is considered to be one of the Big Three index fund managers that dominate corporate America.

<span class="mw-page-title-main">Fidelity Investments</span> American multinational financial services corporation

Fidelity Investments, commonly referred to as Fidelity, earlier as Fidelity Management & Research or FMR, is an American multinational financial services corporation based in Boston, Massachusetts. The company was established in 1946 and is one of the largest asset managers in the world with $4.3 trillion in assets under management, and, as of December 2022, their assets under administration amount to $10.3 trillion. Fidelity Investments operates a brokerage firm, manages a large family of mutual funds, provides fund distribution and investment advice, retirement services, index funds, wealth management, securities execution and clearance, asset custody, and life insurance.

An exchange-traded fund (ETF) is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges. ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars. The list of assets that each ETF owns, as well as their weightings, is posted on the website of the issuer daily, or quarterly in the case of active non-transparent ETFs. Many ETFs provide some level of diversification compared to owning an individual stock.

<span class="mw-page-title-main">Franklin Templeton Investments</span> Global investment firm founded in New York City in 1947

Franklin Resources, Inc. is an American multinational holding company that, together with its subsidiaries, is referred to as Franklin Templeton; it is a global investment firm founded in New York City in 1947 as Franklin Distributors, Inc. It is listed on the New York Stock Exchange under the ticker symbol BEN, in honor of Benjamin Franklin, for whom the company is named, and who was admired by founder Rupert Johnson Sr. In 1973, the company's headquarters moved from New York to San Mateo, California.

Morningstar, Inc. is an American financial services firm headquartered in Chicago, Illinois, and was founded by Joe Mansueto in 1984. It provides an array of investment research and investment management services.

<span class="mw-page-title-main">PIMCO</span> US global investment management firm

PIMCO is an American investment management firm focusing on active fixed income management worldwide. PIMCO manages investments in many asset classes such as fixed income, equities, commodities, asset allocation, ETFs, hedge funds, and private equity. PIMCO is one of the largest investment managers, actively managing more than $2 trillion in assets for central banks, sovereign wealth funds, pension funds, corporations, foundations and endowments, and individual investors around the world. According to the Sovereign Wealth Fund Institute, PIMCO is the 6th-largest Asset Manager in the world by managed AUM.

<span class="mw-page-title-main">Invesco</span> Global investment management company

Invesco Ltd. is an American independent investment management company that is headquartered in Atlanta, Georgia, with additional branch offices in 20 countries. Its common stock is a constituent of the S&P 500 and trades on the New York stock exchange. Invesco operates under the Invesco, Trimark, Invesco Perpetual, WL Ross & Co and Powershares brand names.

<span class="mw-page-title-main">BlackRock</span> American multinational investment management corporation

BlackRock, Inc. is an American multinational investment company. It is the world's largest asset manager, with $9.42 trillion in assets as of June 30, 2023. Headquartered in New York City, Blackrock has 70 offices in 30 countries, and clients in 100 countries. BlackRock is the manager of the iShares group of exchange-traded funds, and along with The Vanguard Group and State Street, it is considered to be one of the Big Three index fund managers. Its Aladdin software keeps track of investment portfolios for many major financial institutions and its BlackRock Solutions division provides financial risk management services. As of 2023, BlackRock was ranked 229th on the Fortune 500 list of the largest United States corporations by revenue.

<span class="mw-page-title-main">Ameriprise Financial</span> Financial services company

Ameriprise Financial, Inc. is a diversified financial services company and bank holding company incorporated in Delaware and headquartered in Minneapolis, Minnesota. It provides financial planning products and services, including wealth management, asset management, insurance, annuities, and estate planning.

In U.S. financial law, a unit investment trust (UIT) is an investment product offering a fixed (unmanaged) portfolio of securities having a definite life. Unlike open-end and closed-end investment companies, a UIT has no board of directors. A UIT is registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and is classified as an investment company. UITs are assembled by a sponsor and sold through brokerage firms to investors.

State Street Global Advisors (SSGA) is the investment management division of State Street Corporation and the world's fourth largest asset manager, with nearly $4.14 trillion (USD) in assets under management as of 31 December 2021.

<span class="mw-page-title-main">ETF Securities</span> Australian asset management firm

ETF Securities is an asset management firm that issues exchange-traded funds (ETFs) primarily in Australia.

Robert D. Van Kampen was an American businessman, who served as a member of various organizational boards in the business world and Christian ministry.

Dimensional Fund Advisors, L.P. is a privately-owned investment firm headquartered in Austin, Texas. Dimensional was founded in Brooklyn in 1981 by David Booth, Rex Sinquefield and Larry Klotz. The company has affiliates within 15 offices in the U.S., Canada, U.K., Germany, Netherlands, Australia, Singapore, and Japan. Dimensional maintains additional U.S. offices in Charlotte, North Carolina and Santa Monica, California and has affiliate offices globally. The company is owned by its employees, board members and outside investors.

Van Kampen Investments, Inc. was an American mutual fund company. Formerly independent, it was acquired by Morgan Stanley in 1996. Most of Morgan Stanley's asset management activities were principally conducted under the Morgan Stanley and Van Kampen brands.

AdvisorShares Investments is a US-based investment management firm based in Bethesda, Maryland which offers actively managed exchange-traded funds (ETFs) through the AdvisorShares Trust. AdvisorShares partners with third party financial advisers who already manage clients’ assets to package their investment strategy using exchange-traded funds. As part of promoting its funds it also provides educational support to help financial advisors and investors understand actively managed ETFs and their underlying investment strategies.

Christian Magoon is an American entrepreneur, author, speaker and business executive, best known for being CEO of Amplify ETFs He specializes in exchange-traded funds.

<span class="mw-page-title-main">Cboe Canada</span> Canadian Stock Exchange

Cboe Canada is a stock exchange based in Toronto. Part of the Cboe Global Markets network, the exchange has over 260 listings for public companies, exchange-traded funds (ETFs), Canadian Depositary Receipts (CDRs), Special Purpose Acquisition Companies (SPACs), and closed-end funds. Cboe Canada handles 15% of the volume traded across Canadian marketplaces, including 20% of Canadian ETF transactions.

VanEck is an American investment management firm headquartered in New York City. The firm is primarily engaged in issuing exchange-traded fund (ETF) products although it also deals with mutual funds and separately managed accounts for institutional investors. It was a pioneer of investing in foreign growth stocks as well as gold investing.

References

  1. ↑ "Form ADV" (PDF). SEC.
  2. 1 2 3 "ETF Insight: Inside First Trust, the silent ETF powerhouse". ETF Stream. June 17, 2019. Retrieved December 9, 2023.
  3. 1 2 3 4 Walker, Danielle. "A small fund manager is generating ETF revenues that rival Vanguard's. Investors appear not to mind the sky-high fees — or its executives' incendiary tweets on BLM protests, gun violence, and more". Business Insider. Retrieved December 9, 2023.
  4. 1 2 3 4 5 Loder, Asjylyn (July 9, 2019). "How a Chicago Suburb Became a Center of ETFs". Wall Street Journal. ISSN   0099-9660 . Retrieved December 9, 2023.
  5. 1 2 3 "Clayton Brown, who ran municipal bond firm, dies at 95". Chicago Tribune. November 28, 2023. Retrieved December 9, 2023.
  6. 1 2 "Nike Securities completes the purchase of Clayton Brown's unit trust division". American Banker. October 2, 1991. Retrieved December 9, 2023.
  7. 1 2 3 Fritz, Michael (November 8, 1999). "A TOP UNIT TRUST SELLER: NIKE COULD EYE SALE WITH FOUNDER'S LOSS". Investment News.
  8. ↑ Maxey, Daisy (December 19, 2006). "First Trust Fund Converts to an ETF". Wall Street Journal. ISSN   0099-9660 . Retrieved December 9, 2023.
  9. 1 2 "First Trust - Asset Management Company | Morningstar". Morningstar, Inc. January 30, 2023. Retrieved December 9, 2023.
  10. ↑ "First Trust plans ETF push in Europe". www.ft.com. Retrieved December 9, 2023.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.