SEC Company Response from FIRST TRUST EXCHANGE-TRADED FUND VIII (CIK 0001667919) — May 8, 2020
FIRST TRUST EXCHANGE-TRADED FUND VIII (CIK 0001667919)
Date: May 8, 2020 · CIK: 0001667919 · Accession: 0001445546-20-002419
AI Filing Summary & Sentiment
File numbers found in text: 333-210186, 811-23147
Letter
May 8, 2020 VIA EDGAR CORRESPONDENCE Jennifer Hardy United States Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549
Re: First Trust Exchange-Traded Fund VIII (the "Trust") File Nos. 333-210186; 811-23147 ------------------------------------------------------
Dear Ms. Hardy:
This letter responds to your comments, provided by telephone on November 26, 2019, regarding the registration statement filed on Form N-1A for First Trust Exchange-Traded Fund VIII (the "Trust") with the staff of the Securities and Exchange Commission (the "Staff") on October 10, 2019 (the "Registration Statement"). The Registration Statement relates to the First Trust Multi-Manager Large Growth ETF (the "Fund"), a series of the Trust. Capitalized terms used herein, but not otherwise defined, have the meanings ascribed to them in the Registration Statement.
COMMENT 1 - GENERAL
Please confirm that the box labeled "this post-effective amendment designates a new effective date for a previously filed post-effective amendment" should not have been checked for this Registration Statement.
RESPONSE TO COMMENT 1
The Fund confirms that the box was checked in error.
COMMENT 2 - GENERAL
Please note that where a comment is made in one section of the prospectus, such comment is applicable to all similar disclosures appearing elsewhere in the prospectus.
RESPONSE TO COMMENT 2
The Fund confirms that revisions made in accordance with the Staff's comments have been applied to similar disclosure throughout the prospectus.
COMMENT 3 - GENERAL
Please ensure that the ticker symbol is updated on EDGAR pursuant to Rule 313(b)(1) of Regulation S-T.
RESPONSE TO COMMENT 3
Pursuant to the Staff's request, the Fund confirms that the ticker symbol will be updated on EDGAR upon effectiveness of the Registration Statement.
COMMENT 4 - FEES AND EXPENSES OF THE FUND
Please include in correspondence along with responses to the other comments herein a completed fee table for the Fund at least five days prior to the effective date of the Registration Statement.
RESPONSE TO COMMENT 4
Pursuant to the Staff's request, a completed fee table for the Fund has been set forth on Exhibit A in this response and has been filed at least five days prior to effectiveness of the Registration Statement.
COMMENT 5 - PRINCIPAL INVESTMENT STRATEGIES
Please clearly distinguish between the strategies and investments utilized by each Sub-Advisor for the portion of the portfolio allocated to each Sub-Advisor. The Staff notes that the current disclosure has a lot of jargon and terminology that isn't commonly understood (e.g., concentrated, conviction-weighted portfolio).
RESPONSE TO COMMENT 5
Pursuant to the Staff's request, the prospectus has been revised accordingly.
COMMENT 6 - PRINCIPAL INVESTMENT STRATEGIES
Please provide more information about the universe of securities the Sub-Advisors will select from and describe how these securities will be "weighted by balancing its conviction against any risk considerations."
RESPONSE TO COMMENT 6
Pursuant to the Staff's request, the prospectus has been revised accordingly. The reference to "weighted by balancing its conviction against any risk considerations" has been removed and a description on how that portion of the Fund's assets are weighted by conviction has been added.
COMMENT 7 - ADDITIONAL INFORMATION ON THE FUND'S INVESTMENT OBJECTIVE AND STRATEGIES
Please also provide more details in your disclosure in response to Item 9(b) about these strategies and investments.
RESPONSE TO COMMENT 7
Pursuant to the Staff's request, the prospectus has been revised accordingly.
COMMENT 8 - PRINCIPAL RISKS
Please add non-diversification risk in the section entitled "Principal Risks" and in response to Item 9(c).
RESPONSE TO COMMENT 8
Pursuant to the Staff's request, the prospectus has been revised accordingly.
COMMENT 9 - PRINCIPAL RISKS
Please revise the order in which risks are disclosed to prioritize those that are most likely to adversely affect the Fund's net asset value, yield and total return in accordance with the Staff's guidance in ADI 2019-08 - Improving Principal Risks Disclosure. The Staff noted that "Authorized Participant Concentration Risk" and "Cyber Security Risk" wouldn't be the most significant risks for this fund.
RESPONSE TO COMMENT 9
The Fund respectfully declines to revise the disclosure as requested by the Staff. Ultimately, the Fund has reached the same conclusion as many other industry participants and declines to make the requested revisions as it believes the disclosure is compliant with the requirements of Form N-1A. The Fund continues to evaluate its approach to the ordering of risk factors in light of recent Staff guidance.
COMMENT 10 - PRINCIPAL RISKS
Please provide disclosure about the risks from the Fund's principal strategy of investing in companies with improving quality and attractive fundamentals, which appears to signify companies that have not been performing well.
RESPONSE TO COMMENT 10
The Fund declines to add this additional risk disclosure and clarifies that improving quality and attractive fundamentals are a function of a company's value rather than a reference to companies that have not been performing well.
COMMENT 11 - PRINCIPAL RISKS
Please provide disclosure about liquidity risk and indicate that in stressed market conditions, the market for the Fund's shares may become less liquid in response to deteriorating liquidity in the markets for the Fund's underlying portfolio holdings, and that this could in turn lead to differences between the market price of the Fund's shares and their net asset value.
RESPONSE TO COMMENT 11
Pursuant to the Staff's request, the prospectus has been revised accordingly.
COMMENT 12 - PRINCIPAL RISKS
Please consider adding a foreign currency risk separate from the "Non-U.S. Securities Risk" in the section entitled "Principal Risks" and in Item 9.
RESPONSE TO COMMENT 12
The Fund declines to add a separate foreign currency risk because it anticipates that the portfolio will be principally composed of securities issued by companies domiciled in the U.S. or non-U.S. companies that are principally traded in the U.S. and American Depositary Receipts.
COMMENT 13 - PRINCIPAL RISKS
Please add a Brexit risk in the section entitled "Principal Risks" and in Item 9, if applicable.
RESPONSE TO COMMENT 13
The Fund declines to add a Brexit risk because it anticipates that the portfolio will not have a significant exposure to European securities.
COMMENT 14 - PERFORMANCE
Please identify the broad-based securities index the Fund intends to use.
RESPONSE TO COMMENT 14
The Fund will use the Russell 1000 Growth Index as its broad-based securities index for performance comparison purposes.
COMMENT 15 - MANAGEMENT
Please state the month and the year that each portfolio manager has served as a part of the portfolio management team of the Fund.
RESPONSE TO COMMENT 15
Pursuant to the Staff's request, the prospectus has been revised accordingly.
COMMENT 16 - ADDITIONAL INFORMATION ON THE FUND's INVESTMENT OBJECTIVE AND STRATEGIES
Please reconcile the reference to the Russell 1000 Growth Index in the section entitled "Additional Information on the Fund's Investment Objective and Strategies" with the reference to the Russell 1000 Index in the section entitled "Principal Investments Strategies."
RESPONSE TO COMMENT 16
References in the prospectus to the "Russell 1000 Index" have been replaced with the "Russell 1000 Growth Index."
COMMENT 17 - ADDITIONAL INFORMATION ON THE FUND's INVESTMENT OBJECTIVE AND STRATEGIES
The Staff notes that Form N-1A provides that the principal investment strategies required by Item 4 in the summary should be based on the information given in response to Item 9 and should be a summary of that information. The Staff states that if the Fund's position is that it discloses everything about its principal investment strategies in the summary, then the Fund has not provided a summary or followed the layered disclosure regime adopted by the Commission in the June 2014 guidance regarding mutual fund enhanced disclosure. The Staff notes in particular that there is no disclosure of the strategies or investments utilized by each Sub-Advisor or any discussion on how the Fund's advisors decide which securities to buy and sell. Please revise to provide more fulsome disclosure in response to each requirement of Item 9(b).
RESPONSE TO COMMENT 17
While some additional disclosure has been added to Item 9 in response to this comment, the Fund believes that the disclosure, as currently separated between Items 4 and 9, is compliant with the requirements of Form N-1A and is presented in a manner conducive to investor comprehension. The Fund notes that part C.3.(a) of Form N-1A states that "information that is included in response to Items 2 through 8 need not be repeated elsewhere in the prospectus."
COMMENT 18 - STATEMENT OF ADDITIONAL INFORMATION
Instead of stating "since inception," please disclose the month and year for the "Term of Office and Year First Elected or Appointed" column in the Trustee table.
RESPONSE TO COMMENT 18
The Fund declines to make the requested revisions as it believes the disclosure is compliant with the requirements of Form N-1A.
COMMENT 19 - STATEMENT OF ADDITIONAL INFORMATION
See Instruction 4 to Item 19(a)(3) and please provide all information required by Item 19(a)(3) including the method of calculating the advisory fee unless the Fund is relying on aggregate fee relief. If the Fund is relying on such relief, please disclose and provide the information in the manner required by the order.
RESPONSE TO COMMENT 19
The Fund is relying on aggregate fee relief and confirms that the information is provided in the manner required by the order.
COMMENT 20 - EXHIBITS
Please file the actual Sub-Advisory Agreements and not forms of the agreements.
RESPONSE TO COMMENT 20
The Fund confirms that the agreements will be updated on EDGAR upon effectiveness of the Registration Statement.
********
Please call me at (312) 845-3484 if you have any questions or issues you would like to discuss regarding these matters.
Very truly yours,
CHAPMAN AND CUTLER LLP
Show Raw Text
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CHAPMAN AND CUTLER LLP 111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
May 8, 2020
VIA EDGAR CORRESPONDENCE
Jennifer Hardy
United States Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: First Trust Exchange-Traded Fund VIII (the "Trust")
File Nos. 333-210186; 811-23147
------------------------------------------------------
Dear Ms. Hardy:
This letter responds to your comments, provided by telephone on November
26, 2019, regarding the registration statement filed on Form N-1A for First
Trust Exchange-Traded Fund VIII (the "Trust") with the staff of the Securities
and Exchange Commission (the "Staff") on October 10, 2019 (the "Registration
Statement"). The Registration Statement relates to the First Trust Multi-Manager
Large Growth ETF (the "Fund"), a series of the Trust. Capitalized terms used
herein, but not otherwise defined, have the meanings ascribed to them in the
Registration Statement.
COMMENT 1 - GENERAL
Please confirm that the box labeled "this post-effective amendment
designates a new effective date for a previously filed post-effective amendment"
should not have been checked for this Registration Statement.
RESPONSE TO COMMENT 1
The Fund confirms that the box was checked in error.
COMMENT 2 - GENERAL
Please note that where a comment is made in one section of the prospectus,
such comment is applicable to all similar disclosures appearing elsewhere in the
prospectus.
RESPONSE TO COMMENT 2
The Fund confirms that revisions made in accordance with the Staff's
comments have been applied to similar disclosure throughout the prospectus.
COMMENT 3 - GENERAL
Please ensure that the ticker symbol is updated on EDGAR pursuant to Rule
313(b)(1) of Regulation S-T.
RESPONSE TO COMMENT 3
Pursuant to the Staff's request, the Fund confirms that the ticker symbol
will be updated on EDGAR upon effectiveness of the Registration Statement.
COMMENT 4 - FEES AND EXPENSES OF THE FUND
Please include in correspondence along with responses to the other comments
herein a completed fee table for the Fund at least five days prior to the
effective date of the Registration Statement.
RESPONSE TO COMMENT 4
Pursuant to the Staff's request, a completed fee table for the Fund has
been set forth on Exhibit A in this response and has been filed at least five
days prior to effectiveness of the Registration Statement.
COMMENT 5 - PRINCIPAL INVESTMENT STRATEGIES
Please clearly distinguish between the strategies and investments utilized
by each Sub-Advisor for the portion of the portfolio allocated to each
Sub-Advisor. The Staff notes that the current disclosure has a lot of jargon and
terminology that isn't commonly understood (e.g., concentrated,
conviction-weighted portfolio).
RESPONSE TO COMMENT 5
Pursuant to the Staff's request, the prospectus has been revised
accordingly.
COMMENT 6 - PRINCIPAL INVESTMENT STRATEGIES
Please provide more information about the universe of securities the
Sub-Advisors will select from and describe how these securities will be
"weighted by balancing its conviction against any risk considerations."
RESPONSE TO COMMENT 6
Pursuant to the Staff's request, the prospectus has been revised
accordingly. The reference to "weighted by balancing its conviction against any
risk considerations" has been removed and a description on how that portion of
the Fund's assets are weighted by conviction has been added.
COMMENT 7 - ADDITIONAL INFORMATION ON THE FUND'S INVESTMENT OBJECTIVE AND
STRATEGIES
Please also provide more details in your disclosure in response to Item
9(b) about these strategies and investments.
RESPONSE TO COMMENT 7
Pursuant to the Staff's request, the prospectus has been revised
accordingly.
COMMENT 8 - PRINCIPAL RISKS
Please add non-diversification risk in the section entitled "Principal
Risks" and in response to Item 9(c).
RESPONSE TO COMMENT 8
Pursuant to the Staff's request, the prospectus has been revised
accordingly.
COMMENT 9 - PRINCIPAL RISKS
Please revise the order in which risks are disclosed to prioritize those
that are most likely to adversely affect the Fund's net asset value, yield and
total return in accordance with the Staff's guidance in ADI 2019-08 - Improving
Principal Risks Disclosure. The Staff noted that "Authorized Participant
Concentration Risk" and "Cyber Security Risk" wouldn't be the most significant
risks for this fund.
RESPONSE TO COMMENT 9
The Fund respectfully declines to revise the disclosure as requested by the
Staff. Ultimately, the Fund has reached the same conclusion as many other
industry participants and declines to make the requested revisions as it
believes the disclosure is compliant with the requirements of Form N-1A. The
Fund continues to evaluate its approach to the ordering of risk factors in light
of recent Staff guidance.
COMMENT 10 - PRINCIPAL RISKS
Please provide disclosure about the risks from the Fund's principal
strategy of investing in companies with improving quality and attractive
fundamentals, which appears to signify companies that have not been performing
well.
RESPONSE TO COMMENT 10
The Fund declines to add this additional risk disclosure and clarifies that
improving quality and attractive fundamentals are a function of a company's
value rather than a reference to companies that have not been performing well.
COMMENT 11 - PRINCIPAL RISKS
Please provide disclosure about liquidity risk and indicate that in
stressed market conditions, the market for the Fund's shares may become less
liquid in response to deteriorating liquidity in the markets for the Fund's
underlying portfolio holdings, and that this could in turn lead to differences
between the market price of the Fund's shares and their net asset value.
RESPONSE TO COMMENT 11
Pursuant to the Staff's request, the prospectus has been revised
accordingly.
COMMENT 12 - PRINCIPAL RISKS
Please consider adding a foreign currency risk separate from the "Non-U.S.
Securities Risk" in the section entitled "Principal Risks" and in Item 9.
RESPONSE TO COMMENT 12
The Fund declines to add a separate foreign currency risk because it
anticipates that the portfolio will be principally composed of securities issued
by companies domiciled in the U.S. or non-U.S. companies that are principally
traded in the U.S. and American Depositary Receipts.
COMMENT 13 - PRINCIPAL RISKS
Please add a Brexit risk in the section entitled "Principal Risks" and in
Item 9, if applicable.
RESPONSE TO COMMENT 13
The Fund declines to add a Brexit risk because it anticipates that the
portfolio will not have a significant exposure to European securities.
COMMENT 14 - PERFORMANCE
Please identify the broad-based securities index the Fund intends to use.
RESPONSE TO COMMENT 14
The Fund will use the Russell 1000 Growth Index as its broad-based
securities index for performance comparison purposes.
COMMENT 15 - MANAGEMENT
Please state the month and the year that each portfolio manager has served
as a part of the portfolio management team of the Fund.
RESPONSE TO COMMENT 15
Pursuant to the Staff's request, the prospectus has been revised
accordingly.
COMMENT 16 - ADDITIONAL INFORMATION ON THE FUND's INVESTMENT OBJECTIVE AND
STRATEGIES
Please reconcile the reference to the Russell 1000 Growth Index in the
section entitled "Additional Information on the Fund's Investment Objective and
Strategies" with the reference to the Russell 1000 Index in the section entitled
"Principal Investments Strategies."
RESPONSE TO COMMENT 16
References in the prospectus to the "Russell 1000 Index" have been replaced
with the "Russell 1000 Growth Index."
COMMENT 17 - ADDITIONAL INFORMATION ON THE FUND's INVESTMENT OBJECTIVE AND
STRATEGIES
The Staff notes that Form N-1A provides that the principal investment
strategies required by Item 4 in the summary should be based on the information
given in response to Item 9 and should be a summary of that information. The
Staff states that if the Fund's position is that it discloses everything about
its principal investment strategies in the summary, then the Fund has not
provided a summary or followed the layered disclosure regime adopted by the
Commission in the June 2014 guidance regarding mutual fund enhanced disclosure.
The Staff notes in particular that there is no disclosure of the strategies or
investments utilized by each Sub-Advisor or any discussion on how the Fund's
advisors decide which securities to buy and sell. Please revise to provide more
fulsome disclosure in response to each requirement of Item 9(b).
RESPONSE TO COMMENT 17
While some additional disclosure has been added to Item 9 in response to
this comment, the Fund believes that the disclosure, as currently separated
between Items 4 and 9, is compliant with the requirements of Form N-1A and is
presented in a manner conducive to investor comprehension. The Fund notes that
part C.3.(a) of Form N-1A states that "information that is included in response
to Items 2 through 8 need not be repeated elsewhere in the prospectus."
COMMENT 18 - STATEMENT OF ADDITIONAL INFORMATION
Instead of stating "since inception," please disclose the month and year
for the "Term of Office and Year First Elected or Appointed" column in the
Trustee table.
RESPONSE TO COMMENT 18
The Fund declines to make the requested revisions as it believes the
disclosure is compliant with the requirements of Form N-1A.
COMMENT 19 - STATEMENT OF ADDITIONAL INFORMATION
See Instruction 4 to Item 19(a)(3) and please provide all information
required by Item 19(a)(3) including the method of calculating the advisory fee
unless the Fund is relying on aggregate fee relief. If the Fund is relying on
such relief, please disclose and provide the information in the manner required
by the order.
RESPONSE TO COMMENT 19
The Fund is relying on aggregate fee relief and confirms that the
information is provided in the manner required by the order.
COMMENT 20 - EXHIBITS
Please file the actual Sub-Advisory Agreements and not forms of the
agreements.
RESPONSE TO COMMENT 20
The Fund confirms that the agreements will be updated on EDGAR upon
effectiveness of the Registration Statement.
********
Please call me at (312) 845-3484 if you have any questions or issues you
would like to discuss regarding these matters.
Very truly yours,
CHAPMAN AND CUTLER LLP
By: /s/ Morrison C. Warren
------------------------------
Morrison C. Warren
<PAGE>
EXHIBIT A
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment)
Management Fees 0.85%
Distribution and Service (12b-1) Fees 0.00%
Other Expenses(1) 0.00%
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.85%
--------------------------------------------------------------------------------
(1) "Other Expenses" is an estimate based on the expenses the Fund expects to
incur for the current fiscal year.
Example
The example below is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. This example does not take into
account customary brokerage commissions that you pay when purchasing or selling
shares of the Fund in the secondary market.
The example assumes that you invest $10,000 in the Fund for the time periods
indicated. The example also assumes that your investment has a 5% return each
year and that the Fund's operating expenses remain at current
levels. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
1 Year 3 Years
--------------------------------------------------------------------------------
$87 $271
--------------------------------------------------------------------------------
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