First Trust Announces a 1-for-5 Reverse Share Split for FT Confluence BDC & Specialty Finance ETF
MWN-AI** Summary
First Trust Advisors L.P. has announced a 1-for-5 reverse share split for the FT Confluence BDC & Specialty Finance ETF (NYSE Arca: FBDC). Approving this move, the Board of Trustees of First Trust Exchange-Traded Fund VIII aims to consolidate the number of shares outstanding, with every five shares being converted into one. Following the completion of the split, that will occur around August 4, 2025, shareholders will see their accounts reflect approximately one-fifth fewer shares, while the net asset value (NAV) per share will increase to reflect the combined shares. Importantly, this maneuver is designed to maintain the total value of a shareholder’s investment in the Fund.
While the reverse share split itself is not expected to trigger tax implications for shareholders, the conversion of fractional shares into cash might result in realized gains or losses, should shareholders consult their tax advisors for further guidance. The ETF will continue to trade under the ticker symbol FBDC, though it will be assigned a new CUSIP number that is yet to be determined.
FT Confluence BDC & Specialty Finance ETF aims to provide strong current income and attractive total returns through investments primarily in business development and specialty finance companies. The Fund's investment sub-advisor, Confluence Investment Management LLC, boasts over 600 years of collective financial experience, managing approximately $12.7 billion in assets as of March 31, 2025.
Investors are advised to closely review the Fund's prospectus for critical information on investment objectives, risks, and costs before making any decisions. This announcement is not an offer to buy or sell shares of the Fund.
MWN-AI** Analysis
The recent announcement by First Trust Advisors L.P. regarding a 1-for-5 reverse share split for the FT Confluence BDC & Specialty Finance ETF (FBDC) presents both risks and opportunities for investors. Set to take effect around August 4, 2025, this strategy aims to elevate the share price while reducing the outstanding number of shares. Although such maneuvers often signal management’s confidence in the underlying assets, they can also raise questions regarding liquidity and investor sentiment.
In essence, the reverse split will quintuple the share price, while investors will possess one-fifth fewer shares, leaving the overall investment value unchanged. The primary objective of the Fund is to generate a high level of current income through investments in business development companies (BDCs) and specialty finance firms. This focus remains compelling, especially as the economic climate potentially favors income-generating assets amid shifting interest rates.
However, potential investors should weigh the implications of this restructuring carefully. Reverse splits can sometimes indicate underlying issues, such as poor performance or a declining share price. Monitoring market reactions closer to the effective date will yield insights into investor sentiment post-split. Furthermore, shareholders receiving cash for fractional shares may face tax implications, which warrants consideration and consultation with tax advisors.
Given FBDC’s investment strategy and the expertise of its sub-advisor, Confluence Investment Management, those seeking high-income opportunities may find merit in the Fund, especially if they believe in the potential growth of BDCs and specialty finance companies. Nonetheless, maintaining a diversified portfolio and being cautious of timing the market around the split will be paramount for savvy investors. Overall, while the reverse split may streamline the share structure, investors should remain vigilant, assess their risk tolerance, and approach with a long-term perspective.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
First Trust Advisors L.P. (“FTA”) announced today that the Board of Trustees (the “Board”) of First Trust Exchange-Traded Fund VIII (the “Trust”), on behalf of FT Confluence BDC & Specialty Finance ETF (the “Fund”), an actively-managed exchange-traded fund (NYSE Arca: FBDC), approved a 1-for-5 reverse share split.
The reverse share split will result in every five outstanding shares of the Fund being converted into one share of the Fund, with any resulting fractional shares of the Fund being paid out in cash to the beneficial shareholder. As a result of the reverse share split, the price per share of the Fund will increase by approximately five-times its price immediately prior to the split and the number of the Fund’s total shares outstanding will correspondingly decrease. Subject to the payment of cash for fractional shares, once the reverse share split is complete, each shareholder’s account will reflect approximately one-fifth fewer Fund shares with a net asset value per share that reflects the combined shares and the reverse share split will not change the total value of a shareholder’s investment in the Fund. While the reverse share split itself is not expected to be a taxable event to shareholders, receipt of cash in lieu of fractional shares may cause some shareholders to realize gains or losses, and shareholders are encouraged to consult their own tax advisors regarding any specific implications.
The Fund’s shares will continue to trade under the same ticker symbol, FBDC. The Fund’s current CUSIP number (33740F110) will be replaced by a new CUSIP number that is yet to be determined, but will be announced once available. FTA currently anticipates the reverse share split will be effective as of the opening of business on NYSE Arca on or about August 4, 2025, subject to all regulatory requirements and other conditions being satisfied.
The Fund is an actively managed ETF that seeks to provide a high level of current income, with a secondary objective of attractive total return. The Fund pursues these investment objectives by investing in business development companies and other specialty finance companies that the Fund’s investment sub-advisor, Confluence Investment Management LLC (“Confluence”), believes offer attractive opportunities for income and capital appreciation.
FTA is a federally registered investment advisor and serves as the Fund's investment advisor. FTA and its affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately-held companies that provide a variety of investment services. FTA has collective assets under management or supervision of approximately $278.7 billion as of June 30, 2025, through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts. FTA is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. FTA and FTP are based in Wheaton, Illinois.
Confluence Investment Management LLC, an SEC registered investment advisor, serves as the investment sub-advisor to the Fund. The Confluence team has more than 600 years of combined financial experience and 400 years of portfolio management/research experience, maintaining a track record that dates back to 1994. As of March 31, 2025, Confluence had $12.7 billion in assets under management and advisement (assets under management = $7.2 billion; assets under advisement = $5.5 billion).
This press release is not intended to, and shall not, constitute an offer to purchase or sell shares of the Fund. An investor should carefully consider the investment objectives, risks, charges and expenses of the Fund before investing. The prospectus for the Fund contains this and other important information and is available free of charge by calling First Trust Portfolios L.P. at 1-800-621-1675 or visiting www.ftportfolios.com . The prospectus should be read carefully before investing.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250722306267/en/
Jeff Margolin – (630) 517-7643
Jim Dykas – (630) 517-7665
FAQ**
How will the 1-for-5 reverse share split of the FT Confluence BDC & Specialty Finance Income ETF FBDC impact the Fund's long-term investment strategy and goals?
What factors led the Board of Trustees to approve the reverse share split for the FT Confluence BDC & Specialty Finance Income ETF FBDC at this time?
How does the current market environment affect the performance expectations of the FT Confluence BDC & Specialty Finance Income ETF FBDC following the share split?
Are there any potential risks or considerations that shareholders should be aware of related to the reverse share split of the FT Confluence BDC & Specialty Finance Income ETF FBDC?
**MWN-AI FAQ is based on asking OpenAI questions about FT Confluence BDC & Specialty Finance Income ETF (NYSE: FBDC).
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