First Trust's quantitative research process is grounded in empirical research and focuses on taking insights and evidence from academia as well as First Trust's proprietary research and transforming it into investable portfolios. The disciplined, repeatable nature of our quantitative investment process removes emotion from the decision-making process and focuses on factors that can be broadly categorized as value, momentum, quality, low volatility or small size.
First Trust's fundamental research process is based on the belief that a company's long-term value is determined by the cash flow it generates. In making portfolio decisions, the team considers the cash flow generated by a business (both realized and forecasted), the asset base employed to generate that cash flow, management's stewardship of investor capital and the associated level of risk versus return expectations. The investment management team seeks to own quality companies, with defensible businesses, that have low embedded market expectations relative to expected value.
The team believes the disciplined, systematic application of its proprietary processes will lead to long-term value creation for clients.