First Trust RiverFront Dynamic Europe ETF (RFEU US) – Portfolio Construction Methodology

The investment strategy governing the actively managed First Trust RiverFront Dynamic Europe ETF targets capital appreciation from European equities while dynamically managing currency exposure. RiverFront filters the investable universe using liquidity, investability and data screens, then applies a quantitative matrix to score countries and regions on fundamental and technical momentum. A proprietary valuation model and qualitative assessment drive country/region and thematic rotations; security selection within favored markets follows value and momentum disciplines. The portfolio invests ≥80% of net assets in equity of European companies, including common stock, depositary receipts and REITs, and may hedge 0–100% of non-USD currency exposure with forward and spot FX. Position sizing scales to relative attractiveness, with larger weights in the most compelling regions and names; allocations and hedges are adjusted as valuation, momentum and risk inputs evolve. Use of OTC forwards introduces counterparty and liquidity risks that are monitored.

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