First Trust Multi-Manager Small Cap Opportunities ETF

First Trust Multi-Manager Small Cap Opportunities ETF (MMSC) is an actively managed fund that splits its money between two outside managers, Driehaus Capital Management and Stephens Investment Management Group. Each picks small-company growth stocks. Its 0.95% expense ratio is far above the 0.23% average of similar funds; Vanguard Russell 2000 Growth ETF charges 0.10%. Over the three years to October 27, 2026, MMSC returned more than those peers.

• Over the year to Oct 27, 2026, MMSC returned +7.8%, 3rd of 6 among similar funds.
• Its 5-year annualized return was +5.1%.
• Its worst full calendar year was 2022 (-31.0%); its best was 2024 (+22.2%).
• The deepest fall in its price history was 40.8% (Nov 8, 2021 to Jun 16, 2022), recovered by Nov 11, 2024.

As of Aug 31, 2026, the fund held 202 securities; the ten largest made up 14.02% of assets.

• Over the three months to Aug 31, 2026, investors withdrew a net $7K (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +4.56%, -7.85%, +2.28%.

MMSC does not track an index. Its adviser, First Trust Advisors, hires and oversees sub-advisors, which are outside firms that each run a slice of the fund's money. First Trust chose Driehaus Capital Management and Stephens Investment Management Group and split the assets equally between them when the fund launched. Their slices drift as markets move, so First Trust periodically rebalances them back to equal weight. It can also propose new or replacement managers to the fund's board.

Both managers start from the stocks in the Russell 2000 Growth Index. At least 80% of assets must be in small companies within that index's size range, which ran from $12.35 million to $30.72 billion as of November 28, 2025. Driehaus looks for financially strong companies at a "growth inflection point," where earnings growth is speeding up. It also reviews ESG (environmental, social and governance) research but doesn't exclude stocks on that basis alone. Stephens works from the belief that earnings growth drives stock prices. It uses behavioral finance, the study of how investor biases cause stocks to be mispriced.

As of August 31, 2026, the fund held 202 stocks, and the 10 largest made up only about 14% of assets. The top three were Twist Bioscience, JFrog and Xometry. It held no derivatives. Trading is frequent: portfolio turnover was 84%.

• MMSC charges 0.95% a year, versus an average of 0.23% for the similar funds below (6th of 6, cheapest first).

It is an actively managed bet on small-company growth stocks with a 0.95% fee and a one-year beta of 1.54, meaning it swung about one and a half times as much as the broad market.

MMSC could add fast-growing smaller companies that large-company funds mostly miss. The trade-off is volatility. The fund launched in October 2021, so it has no record in the 2008 crisis or the 2020 crash. In the 2022 bear market it fell 35.8% between January 3 and June 16, 2022. It took about 28 months to recover. Its deepest drop was 40.8%, measured from its November 2021 peak, and it didn't regain that peak until November 11, 2024. Its worst calendar year was 2022, when it lost about 31%. Anyone who had to sell shares during that stretch would have locked in losses. The fund paid no distributions in the last year, so it provides no income. Its 0.95% expense ratio is well above the 0.23% peer average. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.