ETF Evaluator: First Trust Income Opportunity ETF () Follow This ETF

First Trust Income Opportunity ETF Overview

First Trust Income Opportunity ETF (FCEF) is an actively managed Allocation Global Moderately Conservative Allocation exchange-traded fund (ETF). First Trust launched the ETF in 2016.

The investment seeks to provide current income with a secondary emphasis on total return. The fund seeks to achieve its investment objectives by investing in a portfolio of closed-end investment companies ("closed-end funds") and exchange-traded funds ("ETFs") that are listed and traded in the United States on registered exchanges. In selecting the closed-end funds and ETFs for the fund’s portfolio, the fund's investment advisor utilizes a range of investment approaches.

About First Trust Income Opportunity ETF (FCEF)

There are 1 members of the management team with an average tenure of 9.85 years: Ken Fincher (2016). Management tenure is more important for actively managed ETFs than passive index ETFs.

The ETF has 3 primary benchmarks: Russell 3000 TR USD index with a weighting of 100%, First Trust Eity Cld-End Fund TR USD index with a weighting of 60% and First Trust Tax FI Cld-End Fund TR USD index with a weighting of 40%. First Trust Income Opportunity ETF has 63 securities in its portfolio. The top 10 holdings constitute 33.2% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a diversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.

First Trust Income Opportunity ETF is part of the Allocation global asset class and is within the Allocation ETF group. First Trust Income Opportunity ETF has 16.9% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 45.1% There is 9.9% allocated to foreign stock, and 6.1% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 35.2% (28.1% domestic bond, 7.1% foreign bond and 2.0% convertible bond). First Trust Income Opportunity ETF has -2.0% of the portfolio in cash.

Assets Under Management

The fund has $80 million in total assets, which is below the $293 million average for the Global Moderately Conservative Allocation 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.

FCEF 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 Income Opportunity ETF expense ratio is high compared to funds in the Global Moderately Conservative Allocation category. First Trust Income Opportunity ETF has an expense ratio of 3.69%, which is 163% higher than its category average, making the fund expense ratio grade a F. 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 Income Opportunity ETF has a portfolio turnover rate of 15%, which indicates that it holds its assets around / 0.1 years. By way of comparison, the average portfolio turnover is 154% for the Global Moderately Conservative Allocation category.

Recently, in the month of July 2026, First Trust Income Opportunity ETF returned -0.6%, which earned it a grade of B, as the Global Moderately Conservative Allocation category had an average return of -0.8%. 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 Income Opportunity ETF has a trailing yield of 5.67%, which is above the 4.36% category average. The fund normally distributes its income monthly.

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 Income Opportunity ETF Grades

Year to date, the ETF has returned 7.8%, 1.7 percentage points better than the category, which translates into a grade of A. The fund has returned 13.2% over the past year (grade of B), 14.3% over the past three years (grade of A) and 6.1% per year over the past five years (grade of B).

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