First Trust Multi Cap Value AlphaDEX® Fund (FAB)

Overview

The First Trust Multi Cap Value AlphaDEXu00ae Fund (FAA) seeks investment results that correspond generally to the price and yield of the NASDAQ AlphaDEXu00ae Multi Cap Value Index. The fund invests in a diversified portfolio of multi-cap value stocks selected by the AlphaDEXu00ae methodology, which ranks stocks based on growth factors including three, six, and 12-month sales to price, and sales per share. Value factors include book value to price, cash flow to price, and return on assets.

Reputation and Reliability

First Trust is a well-established ETF issuer with a long track record and a reputation for innovation and offering a wide range of investment strategies.

Management Expertise

First Trust Advisors L.P. has extensive experience in managing ETFs, including quantitative and factor-based strategies. Their team is experienced in implementing and managing AlphaDEXu00ae methodology-based funds.

Goal

To replicate the price and yield performance of the NASDAQ AlphaDEXu00ae Multi Cap Value Index.

Investment Approach and Strategy

Strategy: The fund aims to provide investment results that correspond generally to the price and yield of the NASDAQ AlphaDEXu00ae Multi Cap Value Index.

Composition Primarily holds a diversified portfolio of multi-cap value stocks, selected based on growth and value factors according to the AlphaDEXu00ae methodology.

Market Share: Market share in the multi-cap value ETF segment is moderate; specific current data not available.

Total Net Assets (AUM): 1109000000

Key Competitors

• VTV
• IJS
• VOE

Competitive Landscape

The multi-cap value ETF market is competitive, with several well-established players. FAA distinguishes itself through its AlphaDEXu00ae methodology, which can provide potentially higher returns than passively managed ETFs. However, this active strategy may come with higher expense ratios. Competitors such as VTV and VOE offer passively managed, lower-cost alternatives, while IJS focuses on small-cap value, providing a different risk/return profile.

Historical Performance: Historical performance varies based on market conditions. Investors should review the fund's factsheet or prospectus for specific returns over various time periods. Performance can fluctuate based on market volatility.

Benchmark Comparison: The fund's performance should be compared to the NASDAQ AlphaDEXu00ae Multi Cap Value Index. Outperformance or underperformance relative to the index indicates the effectiveness of the AlphaDEXu00ae methodology.

Expense Ratio: 0.7

Average Trading Volume

The average daily trading volume is moderate, suggesting sufficient liquidity for most investors.

Bid-Ask Spread

The bid-ask spread is typically narrow, indicating efficient trading and relatively low transaction costs.

Market Environment Factors

Economic growth, interest rate changes, and value stock cycles significantly affect FAA's performance. The fund is sensitive to broader market trends and the performance of its underlying holdings.

Growth Trajectory

Growth is dependent on the sustained performance of the value factor in the market and the success of the AlphaDEXu00ae methodology. Changes in the economy and investor sentiment may impact growth patterns.

Competitive Edge

FAA's competitive edge lies in its unique AlphaDEXu00ae methodology, which is a rules-based, quantitative approach to selecting value stocks. The fund actively seeks to identify stocks with strong growth potential and attractive valuation metrics. This strategy has the potential to outperform traditional value benchmarks, but also carries higher risks due to its active nature. This unique quantitative approach differentiates FAA from passive value ETFs.

Volatility

Volatility is moderate to high depending on market conditions and the underlying stock holdings.

Market Risk

The fund is subject to market risk, including the potential for declines in the value of its holdings due to economic downturns, sector-specific challenges, or broader market sell-offs.

Ideal Investor Profile

The ideal investor is one seeking value equity exposure within the multi-cap universe, understands and accepts the potential for higher volatility, and desires a rules-based selection methodology.

Market Risk

FAA is more suitable for long-term investors who are comfortable with moderate to high risk and seeking potential outperformance compared to passive value strategies.

First Trust Multi Cap Value AlphaDEXu00ae Fund is a multi-cap value ETF that employs the AlphaDEXu00ae methodology to select stocks based on growth and value factors. The fund seeks to replicate the performance of the NASDAQ AlphaDEXu00ae Multi Cap Value Index and offers a differentiated approach compared to passive value ETFs. Investors should be aware of the higher expense ratio and the potential for increased volatility. Its unique active management strategy may attract investors seeking outperformance relative to passively managed value funds.

Data Sources:

• First Trust Website
• ETF.com
• FactSet

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions. Market share is estimated based on available data. Financial data is dynamic and may change over time.