At a glance
LDSF charges 0.87% a year, above the 0.86% average of the 7 funds most like it (the 6th cheapest of 8). It has $164.6M in assets, the 8th largest of that group; it paid 5.08% of its price in distributions over the past 12 months, monthly. Over the past year it returned +1.5% with distributions reinvested, the weakest of those 8 funds; over three years it returned +5.5% a year. At its worst it fell 8.6% in the 2020 crash (S&P 500: 33.7%) and 6.6% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 4 months and 14 months after the lows.
The short version
First Trust Low Duration Strategic Focus ETF (LDSF) is an actively managed fund of funds. It owns about nine other bond ETFs, almost all run by First Trust, and keeps the portfolio's duration at three years or less. Its main goal is income, which it pays monthly, and its second goal is preserving capital. Its 0.87% expense ratio is well above its 0.20% management fee, because holders also bear the costs of the funds it owns.
Price history
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LDSF +1.5% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| LDSF official prospectus, to Dec 31, 2024 | — | +4.17% | — | +1.42% | — | +2.11% |
| LDSF price data to Oct 27, 2026 | +0.5% | +1.5% | +5.5% | +2.5% | — | +2.4% |
- Over the year to Oct 27, 2026, LDSF returned +1.5%, 8th of 8 among similar funds.
- Its 5-year annualized return was +2.5%.
- In the 2020 COVID crash it fell 8.6% and regained its old high 4.4 months after the low.
- Its worst full calendar year was 2022 (-5.4%); its best was 2025 (+7.1%).
- The deepest fall in its price history was 8.6% (Mar 3, 2020 to Mar 23, 2020), recovered by Aug 5, 2020.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +0.5% | — |
| 2025 | +7.1% | — |
| 2024 | +4.3% | +4.17% |
| 2023 | +6.5% | +6.60% |
| 2022 | -5.4% | -5.27% |
| 2021 | -0.1% | -0.33% |
| 2020 | +2.5% | +2.34% |
| 2019 | +4.5% | — |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 8.3% over that stretch · deepest drop along the way 8.6%, back to its old high 4.4 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 6.5% over that stretch · deepest drop along the way 6.6%, back to its old high 14.1 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $0.7300 | |
| 2025 | $0.9100 | +5.8% |
| 2024 | $0.8600 | +13.2% |
| 2023 | $0.7600 | +55.1% |
| 2022 | $0.4900 | +16.7% |
| 2021 | $0.4200 | -22.2% |
| 2020 | $0.5400 | -12.9% |
| 2019 | $0.6200 |
What's inside
As of Aug 31, 2026, the fund held 9 securities; the ten largest made up 99.69% of assets.
| Fund held | Weight | |
|---|---|---|
| First Trust Low Duration Opportunities ETF | 32.83% | |
| First Trust Limited Duration Investment Grade Corporate ETF | 29.88% | |
| First Trust Tactical High Yield ETF | 11.99% | |
| First Trust Senior Loan Fund | 6.54% | |
| VANGUARD BOND INDEX FUNDS SHORT TRM BOND | 4.98% | |
| First Trust Structured Credit Income Opportunities ETF | 4.97% | |
| First Trust Emerging Markets Local Currency Bond ETF | 3.03% | |
| First Trust Enhanced Short Maturity ETF | 3.00% | |
| First Trust Institutional Preferred Securities and Income ETF | 2.47% |
By country
United States 99.69%By asset type
Stocks 99.69%What changed recently
- Over the three months to Aug 31, 2026, investors added a net $3.8M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.02%, -0.03%, +0.45%.
How it works
LDSF does not track an index. Its adviser, First Trust Advisors L.P., chooses which bond ETFs to own. At least 80% of net assets must go into U.S.-listed ETFs that hold income-producing securities. The portfolio must also keep an effective duration of three years or less. Duration measures how sensitive a bond is to interest rates. With a three-year duration, a 1% rise in rates would cut the price by about 3%.
The managers start with a top-down view of the economy: central bank and government policy, growth forecasts, trade and tax policy, and market valuations. They add bottom-up views on rates, credit quality and currencies, then shift money among bond types. The prospectus sets limits. Up to 40% can go into ETFs holding high-yield ("junk") bonds and senior loans. Up to 20% can go into non-U.S. bonds, including up to 10% in emerging markets. Preferred securities and convertible securities are each capped at 10%. Portfolio turnover was 34%.
As of August 31, 2026, the largest holdings were the First Trust Low Duration Opportunities ETF (LMBS, mortgage-related debt) at 32.8%, the First Trust Limited Duration Investment Grade Corporate ETF (FSIG) at 29.9%, the First Trust Tactical High Yield ETF (HYLS) at 12.0% and the First Trust Senior Loan Fund (FTSL) at 6.5%. Vanguard's Short-Term Bond ETF (BSV), at 5.0%, was the only fund from another issuer. The prospectus flags a conflict of interest: First Trust earns fees on the underlying funds too.
What it really costs
- LDSF charges 0.87% a year, versus an average of 0.86% for the similar funds below (6th of 8, cheapest first).
- Of that, 0.2% is the management fee; the rest covers other fund expenses.
Structure and tax notes
- Invests in other funds rather than directly in stocks or bonds, so its holdings are those funds.
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
Its main objective is current income, paid monthly, from a short-duration mix of bond ETFs that includes some higher-risk credit.
LDSF could add monthly income that is less sensitive to interest rates than longer-term bond funds. Its trailing 12-month yield was 5.08% as of October 27, 2026. Its losses have been modest, but they have happened. It dropped 8.6% between March 3 and March 23, 2020, and recovered by August 5, 2020, about 4.4 months later. In 2022, as rates rose, it lost 5.27% for the year, its worst calendar year. Its 2022 decline took about 14 months to recover, until December 2023. It launched in 2019, so it has no record from 2008. Someone who had to sell shares in a year like 2022 would have locked in a loss. The 0.87% expense ratio also reduces the income holders keep. Past results don't predict future returns, and a retirement plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Income seekers who want monthly payouts. The trailing 12-month yield was 5.08% as of October 27, 2026.
- Investors who would rather let First Trust's managers choose among short-term bond sectors than build a mix of bond ETFs themselves.
- Those who want limited rate sensitivity. Duration is capped at three years, and three-year volatility was 2.8% as of October 27, 2026.
Look elsewhere if
- Cost-conscious investors. The 0.87% expense ratio adds First Trust's own fee on top of the costs of the underlying funds.
- Anyone who needs cash-like stability. The fund fell 8.6% in March 2020 and lost 5.27% in 2022.
- Investors who are wary of concentration and conflicts. Eight of its nine funds are run by First Trust, and LMBS and FSIG alone held 32.8% and 29.9%.
Close alternatives
Matched by other buffer (defined-outcome) funds, largest first.
| Fund | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|
| LDSF this fund | 0.87% | $164.6M | +1.5% | +5.5% |
| BUFR FT Vest Laddered Buffer ETF | 0.95% | $10.49B | +11.6% | +16.8% |
| BUFD FT Vest Laddered Deep Buffer ETF | 0.95% | $2.04B | +9.5% | +13.9% |
| PJAN Innovator U.S. Equity Power Buffer ETF - Ja… | 0.79% | $1.44B | +10.5% | +14.8% |
| PDEC Innovator U.S. Equity Power Buffer ETF - De… | 0.79% | $984.1M | +11.6% | +14.9% |
| FDEC FT Vest US Equity Buffer ETF - December | 0.85% | $1.31B | +12.9% | +18.5% |
| FJAN FT Vest US Equity Buffer ETF - January | 0.85% | $1.47B | +12.3% | +17.4% |
| FFEB FT Vest U.S. Equity Buffer Fund - February | 0.85% | $1.42B | +12.9% | +18.6% |
Questions investors ask
Does LDSF pay monthly dividends?
Yes. LDSF pays distributions monthly. Over the 12 months through October 27, 2026, it paid about $0.94 per share, a trailing yield of 5.08%. The amount can change from month to month. The underlying funds hold floating-rate senior loans, mortgage-related debt and corporate bonds, and the income from these moves with interest rates and credit conditions. A trailing yield shows past payments. It does not promise future ones.
Why is LDSF's expense ratio 0.87% if the management fee is only 0.20%?
LDSF is a fund of funds, so the prospectus filed December 29, 2025 lists a total expense ratio of 0.87% against a 0.20% management fee. Most of the gap reflects the fees of the ETFs it owns, which holders pay indirectly. Nearly all of those underlying funds are also run by First Trust. The prospectus notes this gives the adviser a financial incentive to choose its own funds.
What's the difference between LDSF and FSIG?
FSIG is one of LDSF's largest holdings, at 29.9% as of August 31, 2026. FSIG puts at least 80% of its assets in investment-grade corporate bonds. It aims for a duration close to the Bloomberg U.S. Corporate 1-5 Year Index. LDSF spreads its money across nine funds, adding mortgage debt, high-yield bonds, senior loans and emerging-market bonds. That gives it a broader mix. It also adds a second layer of fees on top of FSIG's own.
How has LDSF performed over the last five years?
Returns have been modest. In the prospectus, LDSF's average annual return was 1.42% for the five years through December 31, 2024, and 4.17% for 2024 alone. Based on price, its annualized five-year return was 2.5% as of October 27, 2026. The weakest stretch came in 2022, when the fund lost 5.27%. Its worst quarter in that period was a 3.38% drop in the second quarter of 2022.
Is LDSF safe as a cash alternative?
No. It is not a bank deposit, and the FDIC does not insure it. LDSF's price moves with interest rates and credit markets. It fell 8.6% in March 2020 and lost 5.27% in 2022. It can put up to 40% of net assets in ETFs holding junk bonds and senior loans, which tend to fall when the economy is under stress. Its short duration reduces rate risk, but it does not remove it.