Firm Description and Principal Owner
First Trust Investment Solutions L.P. (formerly Gyroscope Capital Management Group, LLC)
(“FTIS”, “we”, “our”, “the Firm” etc.) offers various portfolio advisory services (“Advisory
Services”). As an SEC registered investment adviser, FTIS specializes in separately-
managed accounts (“SMAs”) with option overlays for Custom Option Solutions, Tax-
Managed and Large Capitalization equity and ETF portfolios FTIS also operates a private
fund which utilizes call option overlay and put purchases. FTIS is headquartered in Naples,
Florida with an office in Wheaton, Illinois.
On August 31, 2023, CW Gyroscope, LLC, Robert Carr and Anthony Cirillo, sold all
outstanding membership interests in the Firm to First Trust Investment Solutions L.P., an
Illinois limited partnership. The general partner of FTIS is The Charger Corporation
(“Charger”). FTIS has one limited partner, Grace Partners of DuPage L.P. (“Grace”). The
general partner of Grace is Charger. Grace has a number of limited partners.
Effective August 31, 2023, Gyroscope Capital Management Group, LLC underwent a legal
entity change and changed its name to First Trust Investment Solutions L.P.
FTIS has partnerships with various independent broker/dealers to provide their Advisory Services
and investing strategies to clients. Clients are provided an investment team with over 50 years of
experience in the investment industry. The team meets weekly to review portfolios and discuss
market strategies. Our approach to investing is to provide clients with quality investment advice
utilizing our knowledge of the option market in seeking to enhance returns.
Clients may impose restrictions regarding investing in certain securities or types of securities.
Clients can inform the investment advisor of any restrictions by email, letter, or verbal instruction.
Participation in Wrap Fee Programs
SMAs are offered through programs operated by one or more RIAs, broker-dealers or other
financial services firms (“Program Sponsors”) offering a package of financial services to
participants (“Participants”) in the program (“Wrap Programs”) or in structures outside of Wrap
Programs. In a Wrap Program, FTIS provides discretionary Advisory Services for a fee (“Advisory
Fee” to Wrap Program Participants who select certain FTIS-advised investment strategies.
Advisory agreements (“Advisory Agreements”) are entered into with Wrap Program Participants
or Program Sponsors. When a Program Sponsor enters into an advisory agreement with FTIS to
provide Advisory Services under one or more investment strategies to its Wrap Program
Participants, it is referred to as a “single contract” relationship (“Single Contract”). When a Wrap
Program Participant enters into an Advisory Agreement directly with FTIS to provide Advisory
Services under one or more of its investment strategies, it is referred to as a “dual contract” (“Dual
Contract”) relationship. Advisory Agreements in Single and Dual Contract relationships generally
include the Advisory Fee paid to FTIS for its Advisory Services. These Advisory Agreements also
include details regarding trade execution, custodian identification, proxy voting authority and
directed brokerage instructions, if any. Information regarding a Participant’s investment
objectives, restrictions and investing experience, financial situation, time horizon, risk tolerance,
and other information needed to determine if an investment strategy is suitable for investment by
such Participant’s account (“Suitability Information”) is generally provided by the Program
Sponsor at account opening and when changes occur.
FTIS participates as a portfolio manager in certain WP sponsored by Envestnet Asset
Management, Inc. and Janney Montgomery Scott. Please refer to the Form ADV Part 2A,
Appendix 1 maintained and provided by the Program Sponsors to these Wrap Programs for
additional information. Additional Wrap Programs may be added throughout the year.
Types of Advisory Services
Custom Options Solutions
Covered Call Transition Strategy
oThe Covered Call Transition Strategy provides a systematic way for clients with
concentrated stock positions to diversify their holdings while setting time and price
limits for the disposition of their stock. These limits allow the client to participate in
stock gains and accrue up-front proceeds from the sale of call options.
oFTIS establishes a customized plan for each client to deliver stock on a regular,
disciplined basis using a ladder of covered calls at various strike prices and
expirations.
Covered Call Income Strategy
oThe Covered Call Income Strategy provides an option overlay for a client’s
concentrated stock or existing portfolio to generate call option premium income.
oFTIS establishes a customized plan for each client to target a specific option premium
target in line with upside participation expectations.
Cash-Secured Put Write Strategy
oThe Cash-Secured Put Write Strategy provides an income strategy for clients that
may wish to own a basket of stocks but at prices lower than the current market. Put
Options can be sold out-of-the-money and clients can receive option premium until
the underlying stocks fall to a target price.
oFTIS establishes a customized plan for each client to target a specific basket of
stocks and expectations for option premium targets in line with buy-in levels for
stock positions.
Hedging Strategies
oCustomized strategies for high net worth investors who are seeking to hedge
exposure to a concentrated stock or market risk such as represented by an index
such as the S&P 500.
oPossible strategies include the purchase of puts, stock collars (zero- premium,
credit, or debit), option spreads, Exchange Fund Replication,
Covered Call Direct Indexing, etc.
oFTIS drafts an account-specific Investment Policy Statement based on the client’s
needs and specific strategy desired. This proposal will determine how FTIS will
proceed at settlement and maintain the strategy on an ongoing basis.
Portfolio Strategies
FTIS’s specialized SMA strategies can be classified into one of four categories; Premium Income,
Tax Advantaged Equity, Long Only Equity or Target Income. Below is a list of available
investment strategies under each category available to clients for investment as follows:
Premium Income Strategies
First Trust Large Cap Core Premium Income Strategy
oOur Large Cap Core Premium Income Strategy invests in the common stock of U.S.-
based companies or ADRs of non-U.S.-based companies. Individual stock positions
that comprise the strategy are weighted according to the in- verse of their GICS
sector-relative volatility and are typically rounded to the nearest 100 shares to
ensure efficient option coverage. Security selection is based on a combination of
discounted cash flow and implied volatility analyses. The strategy entails an active
covered call option overlay that “writes” or “sells” short-dated call options on the
stock positions to generate additional income and provides limited downside
protection. The short call option discipline also incorporates sector-relative volatility.
Positions with higher relative volatility target higher premium generation and lower
upside potential while the opposite is true for those with lower relative volatility.
First Trust Large Cap Value Premium Income Strategy
oOur Large Cap Value Premium Income Strategy invests in the common stock of large
capitalization U.S. based companies or ADRs of a non-U.S. companies with a
historical dividend above the average of the S&P 500 index component companies.
We analyze a company’s historical earnings growth, stock price, and dividend
performance over a five to ten-year period to evaluate the likelihood of a stock
outperforming the S&P 500 Index over the next six to twelve months. The client
receives added value from a Covered Call Option Overlay which works to enhance
account income and provide limited downside price protection. Call options are sold on
stocks, when available, for two to six-months starting at 5% above the current price. Our
proprietary evaluation method of options helps determines which call options are used within
our strategy.
First Trust Large Cap Growth Premium Income Strategy
oOur Large Cap Growth Premium Income Strategy Growth portfolio invests in the
common stock of large capitalization U.S. based companies or ADRs of a non-U.S.
company that we believe have higher than average growth potential as determined
by an analysis of a company’s earnings growth, stock price performance over a five
to ten-year period and the stock’s historical volatility. The client receives added
value from a Covered Call Option Overlay which works to enhance account income
and provides limited downside price protection. Call options are sold on stocks,
when available, for two to six- months starting at 5% above the current price. Our
proprietary evaluation method of options helps determines which call options are
used within our strategy.
First Trust Large Cap Sector Momentum Premium Income Strategy
oOur Large Cap Sector Momentum Premium Income Strategy Optimal Weight
portfolio invests in the 11 GICS sectors of the S&P 500 using ETFs. Using historical
analysis, the strategy seeks to overweight/underweight each sector to provide
outperformance to the S&P 500 Index. In addition, we opportunistically sell covered
calls on the underlying ETFs to in seeking to generate additional income, provide
limited downside protection, and reduce portfolio volatility.
Tax Advantaged Equity Strategies
First Trust Global Core Strategy
oThis strategy seeks to maximize capital appreciation and income commensurate
with the strategy’s global benchmark. The strategy invests in domestic and foreign
equity securities based on fundamental research in accordance with FTIS’ macro-
economic and thematic views while being mindful of benchmark sector weights.
Security selection is a mosaic approach which considers valuation, balance sheet
strength, growth prospects, income, and other factors.
First Trust Large Cap Sector ETF Strategy
oThis strategy seeks to replicate the S&P 500 Index using U.S. Sector ETFs while
also employing a systematic tax loss harvesting discipline.
oFirst, the strategy purchases a portfolio of U.S. Sector ETFs (the “Equity Portfolio”)
to replicates the current sector weights of the S&P 500 Index (“Sector Neutral”). The
Equity Portfolio may be rebalanced periodically, with a scheduled rebalance back
to Sector Neutral at least on an annual basis.
oSecond, the strategy will be monitored for potential tax-loss harvesting opportunities
and replace existing U.S. Sector ETFs with a similar U.S. Sector ETF from a
different ETF sponsor. The ETF switching approach will allow an account to
maintain low tracking error to the S&P 500 Index, capture losses for potential tax
alpha and
limit the potential for ‘wash-sale’ by replacing with a new ETF for that
exposure.
Long Only Equity Strategies
First Trust Large Cap Low Volatility Strategy
oOur Large Cap Low Volatility portfolio invests in the common stock of large
capitalization U.S. based companies or ADRs of non-U.S. companies that display
minimal 12-month volatility and a beta less than the market. Reduced volatility may
limit the portfolio’s upside potential but we believe that the low down- capture ratio
provides the opportunity for the portfolio to outperform over a long- term horizon.
The Low Volatility portfolio is a buy and hold strategy that is reviewed and
rebalanced quarterly for potential tax loss harvesting opportunities.
First Trust SMID Cap Low Volatility Strategy
oOur SMID Cap Low Volatility portfolio invests in the common stock of U.S. based
companies or ADR of a non-U.S. companies with market capitalizations between
$1 and $7 billion that display minimal 12-month volatility and a beta less than the
market. Reduced volatility may limit the portfolio’s upside potential but the low down-
capture ratio should enable the portfolio to outperform over a long-term horizon. The
Low Volatility portfolio is a buy and hold strategy that is reviewed and rebalanced
quarterly for potential tax loss harvesting opportunities.
Target Income Strategies
FT Vest Large Cap Sector ETF Target Income Strategy
oFTIS has licensed the Target Income methodology from Vest Financial LLC.
oProvides investors with a strategy that has a target income investment objective
established on an annualized basis. This strategy seeks to replicate the S&P 500
Index using U.S. Sector ETFs in addition to generating enhanced income by writing
(selling) call options on broad-based index options.
oFirst, the strategy purchases a portfolio of U.S. Sector ETFs (the “Equity Portfolio”)
to replicate the current sector weights of the S&P 500 Index. The Equity Portfolio
may be rebalanced periodically, with a scheduled rebalance back to sector neutral
at least on an annual basis.
oSecond, the strategy will seek additional cash flow in the form of premiums from
selling call options every Friday (the “Weekly Option Expiration Date”) based on a
pre-established target income above the annualized dividend yield of the S&P 500
Index. At the Weekly Option Expiration date, the previously sold call options will be
closed out and the next series of weekly call options will be sold.
oThird, the Equity Portfolio will be monitored for potential tax-loss harvesting
opportunities and replace existing U.S. Sector ETFs with a similar U.S. Sector ETF
from a different ETF sponsor. The ETF switching approach will allow an account to
maintain low tracking error to the S&P 500 Index, capture losses for potential tax
alpha and limit the potential for ‘wash-sale’ by replacing with a new ETF for that
exposure.
FT Vest Large Cap Equity Target Income Strategy
oFTIS has licensed the Target Income methodology from Vest Financial LLC.
oProvides investors with a strategy that has a target income investment objective
established on an annualized basis. This strategy seeks to replicate the S&P 500
Index through stocks while allowing for greater tax efficiency through tax loss
harvesting in addition to generating enhanced income by writing (selling) call options
on broad-based index options.
oFirst, the strategy purchases a portfolio of securities seeking to replicate the S&P
500 Index while allowing for greater tax efficiency and customization. The Equity
Portfolio may be rebalanced periodically, with a scheduled rebalance back to sector
neutral at least on an annual basis.
oSecond, the strategy will seek additional cash flow in the form of premiums from
selling call options every Friday (the “Weekly Option Expiration Date”) based on a
pre-established target income above the annualized dividend yield of the S&P 500
Index. At the Weekly Option Expiration date, the previously sold call options will be
closed out and the next series of weekly call options will be sold.
oThird, the Equity Portfolio will be monitored for potential tax-loss harvesting
opportunities. The strategy will seek to maintain low tracking error to the S&P 500
Index, while capturing losses for potential tax alpha.
SMAs / Sub-Adviser Accounts
FTIS’s Custom Options Solutions and Portfolio Strategies can also be accessed through
SMA/sub-adviser programs. Under these programs, an adviser has a contract with its client to
perform services as an investment manager and possibly custodian services. The adviser, in turn,
establishes a contract with FTIS to provide Advisory Services to the adviser’s client. FTIS
establishes a contract with the adviser on the client’s behalf. FTIS does from time-to-time establish
other such relationships. The advisers/platforms that have contracted with FTIS include:
Platforms:
Platform Name
Turnkey
Asset
Manager
Platform
(“TAMP”
Separate
Account
Manager
(“SMA”
Sub-
Advisor
Agreement
Separate
Account
Manager
(“SMA”
Dual
Contract
Model
Manager
Mount Yale Investment Advisors X X X
Envestnet Asset Management X X X
Schwab Managed Account
Marketplace X X
Fidelity Separate Account Network X X
RBC FLEX Net X X
Sawtooth Solutions, LLC X X
SmartX Advisory Services, LLC X X
Vestmark Advisory Solutions, LLC X X
LPL Financial Services X X X
Sub-Advisor/Dual Contract:
Advisory Firm Firm CRD
Sub-Advisor
Agreement
Dual
Contract
Agreement
Capital Wealth Advisors 158940 X
Moors & Cabot Inc 594 X
IA Network, LLC 319096 X
Janney Montgomery Scott 463 X X
Kayne Anderson Rudnick 104599 X
Congress Wealth Management 310873 X
Zuraw Financial 164527 X
Next Capital Management 110793 X
Channel Wealth 323461 X
Concentrum Wealth Management 167151 X
Financial Enhancement Group 159017 X
Prosperity Financial Group 145540 X
Allen Capital Group 135879 X
RMR Wealth Management 152266 X
Francis Financial 128067 X
Independent Financial Partners 125112 X
Ferguson Shapiro, LLC 297555 X
Claro Advisors LLC 160294 X
Advisory Services Network 146051 X
Harbour Investments, Inc. 19258 X
Old Port Advisors 108228 X
Private Wealth Asset Management 315819 X
Enzi Wealth 315457 X
Vaquero Private Wealth, Ltd 305266 X
San Blas Securities, LLC 290605 X
SB Advisory, LLC 154680 X
Masso Torrence Wealth Management, Inc 311097 X
Private Advisor Group, LLC 155216 X
Cornerstone Wealth Management Group 313269 X
Sanctuary Advisors, LLC 226606 X
Redwood Private Wealth 312942 X
Clearstead Advisors, LLC (Hartland & Co,
LLC) 105674 X
Falcon Wealth Planning, Inc 174092 X
HBW Advisory Services LLC 143665 X
Vivaldi Capital Management LP 160150 X
FTIS acts as sub-advisor on these accounts and transactions are executed by FTIS as authorized
by the program provider at their chosen custodian.
Depending on client investment requirements or investment strategy, FTIS may engage one or
more affiliated or unaffiliated third-party sub-advisers (“Sub-Advisers”) to manage portions of
client assets if deemed in the best interest of a client, subject to the terms of the client’s Advisory
Agreement, investment objectives and risk tolerance. FTIS will generally execute a Sub-Advisory
Agreement with each Sub-Adviser.
If deemed appropriate for a client’s investment strategy, FTIS may recommend an investment
strategy managed by one of its affiliates such as First Trust Advisors L.P., First Trust Direct
Indexing L.P., and Vest Financial LLC. First Trust Advisors L.P. is the Sub-Adviser for the First
Trust Small-Cap Core and the Large Cap Opportunistic Value strategies. FTIS has licensed Vest
Financial LLC’s target income methodology from Vest Financial LLC to manage the Target Income
Strategies described above.
Educational Seminars and Workshops
FTIS does provide educational seminars and workshops for other financial professionals. Topics
include, but are not limited to, financial advisor strategies, daily operations, and client
management. FTIS’s seminars and workshops are educational in nature and do not involve the
sale of insurance or investment products.
Private Funds
FTIS provides discretionary investment advisory services to the following private pooled
investment vehicles (each a “Fund” or “Client” and collectively the “Funds” or the “Clients”):
•The FTIS Enhanced Liquid Income Master Fund, LP, a Cayman Islands
exempted limited partnership the (“FELI Master”),
•The FTIS Enhanced Liquid Income Offshore Fund, LLC, an exempted company
incorporated in the Cayman Islands with limited liability the (“FELI
Offshore Feeder”) which acts as a designated feeder into the FELI Master, and
•The FTIS Enhanced Liquid Income Fund, LP, a Delaware limited partnership the
(“FELI Onshore Fund”), which acts as a designated feeder into the FELI Master, and
together with the FELI Offshore Feeder and FELI Master, (the “FELI Funds”).
The FTIS Enhanced Liquid Income Fund GP, LLC is the General Partner of FELI Master and FELI
Onshore. The General Partner is Delaware a limited liability company. The Fund is managed in
accordance with its own investment objective as set forth in the relevant governing and offering
documents of the Fund (each, a “Governing Fund Document” and collectively, the “Governing Fund
Documents”). Investment objectives are not tailored to any particular private fund investor (each,
an "Investor" or “limited partner”). Interests in the Funds are only offered to certain “accredited
investors” as defined in Rule 501 of Regulation D under the Securities Act of 1933 or “qualified
purchasers” as defined in Section 2(a)(51) of the Investment Company Act.
FTIS provides portfolio advisory and management services to the Funds based on the
investment objectives of the Funds and not based on the criteria or investment objective of any
individual Investor in the Funds. FTIS may launch additional funds in the future.
FTIS may enter into side letters or other similar arrangements with certain Investors that have
the effect of establishing rights under, supplementing or altering a Fund’s partnership agreement
or an Investor’s subscription agreement. Such rights or alterations could be regarding economic
terms, fee structures, excuse rights, information rights, and/or transfer rights. For the most part,
any rights established, or any terms altered or supplemented will govern only the investment of
the specific Investor and not the terms of a Fund as whole. Certain such additional rights but
not all rights, terms or conditions may be elected by certain sizeable investors with “most
favored nation” rights pursuant to a Fund’s limited partnership agreement.
Assets Under Management
As of December 31, 2023, FTIS had $518,127,030 in customer assets under management, all
of which are managed on a discretionary basis.