First Trust Long Duration Opportunities ETF

First Trust Long Duration Opportunities ETF (LGOV) is an actively managed bond fund. It holds mostly US government-backed mortgage securities and Treasuries, and it aims for an average duration (a measure of how much prices react to interest rates) of eight years or more. That makes it very sensitive to rate moves. Its 0.49% expense ratio is far above the 0.03% to 0.04% charged by similar funds such as MBB and VGLT.

• Over the year to Oct 27, 2026, LGOV returned -4.0%, 2nd of 8 among similar funds.
• Its 5-year annualized return was -2.6%.
• In the 2020 COVID crash it fell 11%, and had not regained its old high by the end of the data.
• Its worst full calendar year was 2022 (-19.8%); its best was 2020 (+11.3%).
• The deepest fall in its price history was 30.8% (Mar 9, 2020 to Oct 19, 2023), not yet recovered.

As of Jul 31, 2026, the fund held 130 securities; the ten largest made up 21.84% of assets.

The bonds mature in 20.4 years on average (weighted by size), with an average coupon of 2.76%.

• Over the three months to Jul 31, 2026, investors withdrew a net $24.5M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.03%, +0.64%, -2.76%.

LGOV does not track an index. First Trust's portfolio managers choose the holdings. At least 80% of net assets must go into investment-grade bonds issued or guaranteed by the US government, its agencies (such as Ginnie Mae) or government-sponsored entities (such as Fannie Mae and Freddie Mac). The managers first decide how to split money between mortgage bonds and Treasuries, then pick individual securities. They keep the portfolio's average duration at eight years or more. As a rough guide, a one-point rise in rates would cut the value of an eight-year-duration portfolio by about 8%.

As of July 31, 2026, the fund held 130 issues, and the top 10 made up 21.8% of assets. The largest were a Fannie Mae mortgage bond (FNR 2012-134 ZC) at 3.2%, a Freddie Mac mortgage bond (FHR 5299 ZA) at 2.7%, and a Treasury bond paying 1.625% and due in 2050 at 2.1%. Government-sponsored entities made up 56% of assets, agencies 25% and the Treasury 16%.

The fund also uses some less simple tools. It buys mortgage bonds through "to-be-announced" trades, where the exact bonds are named only shortly before delivery, and through "dollar rolls." It may put up to 20% in other debt, including junk bonds, and it can use futures, options and swaps. It may also sell short up to 30% of assets. Turnover was 158%. Some share creations and redemptions happen in cash, which can make the fund less tax-efficient than other ETFs.

• LGOV charges 0.49% a year, versus an average of 0.03% for the similar funds below (8th of 8, cheapest first).

Its government-backed bonds have moved little with stocks, but its long duration means rising interest rates can cause deep losses.

LGOV could add monthly income and a holding that moves somewhat independently of stocks. As of October 27, 2026, its one-year beta (how much it moves with the stock market) was 0.21. It is not protected from rising rates, though. The fund launched in 2019, so it has no 2008 record. It fell 11% in March 2020 and 19.3% during the 2022 bear market. Its prospectus shows 2022 as its worst calendar year, at -19.82%. Its deepest drop was 30.8%, from March 2020 to October 2023, and the fund had not recovered that loss as of October 27, 2026. Someone who had to sell during that stretch would have locked in losses. The trailing yield was 5.13% as of October 27, 2026, paid monthly. The 0.49% expense ratio compares with an average of 0.03% for similar funds. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).