ETF Evaluator: First Trust AAA CMBS ETF () Follow This ETF

First Trust AAA CMBS ETF Overview

First Trust AAA CMBS ETF (CAAA) is an actively managed Taxable Bond Securitized Bond - Focused exchange-traded fund (ETF). First Trust launched the ETF in 2024.

The investment seeks to maximize long-term total return. Under normal market conditions, the fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in commercial mortgage-backed securities (“CMBS”) with a ‘AAA’ rating (or equivalent) at the time of purchase, as determined by at least one nationally recognized statistical rating organization (“NRSRO”) or, if unrated, as determined by the Advisor to be of comparable credit quality at the time of purchase. The fund is non-diversified.

About First Trust AAA CMBS ETF (CAAA)

There are 3 members of the management team with an average tenure of 2.42 years: Jeremiah Charles (2024), Owen Aronson (2024) and Jim Snyder (2024). Management tenure is more important for actively managed ETFs than passive index ETFs.

First Trust AAA CMBS ETF has 119 securities in its portfolio. The top 10 holdings constitute 37.0% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a nondiversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.

First Trust AAA CMBS ETF is part of the Fixed Income global asset class and is within the Taxable Bond ETF group. First Trust AAA CMBS ETF has 0.0% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0% There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 97.9% (97.9% domestic bond, 0.0% foreign bond and 0.0% convertible bond). First Trust AAA CMBS ETF has 2.1% of the portfolio in cash.

Assets Under Management

The fund has $35 million in total assets, which is below the $1 billion average for the Securitized Bond - Focused category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

CAAA Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The First Trust AAA CMBS ETF expense ratio is below average compared to funds in the Securitized Bond - Focused category. First Trust AAA CMBS ETF has an expense ratio of 0.30%, which is 4% lower than its category average, making the fund expense ratio grade a C. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. First Trust AAA CMBS ETF has a portfolio turnover rate of 92%, which indicates that it holds its assets around / 0.0 years. By way of comparison, the average portfolio turnover is 51% for the Securitized Bond - Focused category.

Recently, in the month of July 2026, First Trust AAA CMBS ETF returned -0.5%, which earned it a grade of F, as the Securitized Bond - Focused category had an average return of 0.3%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.

First Trust AAA CMBS ETF has a trailing yield of 4.67%, which is below the 5.32% category average. The fund normally distributes its income monthly and its capital gains annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

First Trust AAA CMBS ETF Grades

Year to date, the ETF has returned 0.7%, 1.8 percentage points worse than the category, which translates into a grade of F. The fund has returned 4.0% over the past year (grade of F).

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