First Trust Multi Cap Growth AlphaDEX® Fund (FAD)

Overview

The First Trust Multi Cap Growth AlphaDEXu00ae Fund (Symbol: FNK) is an actively managed ETF that aims to provide capital appreciation by investing in a diversified portfolio of U.S. common stocks selected using the AlphaDEXu00ae methodology. This methodology ranks stocks based on growth and value factors. The fund focuses on companies across various market capitalizations, with a primary emphasis on growth-oriented businesses.

Reputation and Reliability

First Trust is a well-established financial services company known for its range of actively managed ETFs and unit investment trusts. They have a significant presence in the ETF market and a reputation for innovative product development.

Management Expertise

The fund is managed by First Trust Advisors L.P., which employs a team of investment professionals with experience in quantitative analysis and portfolio management, utilizing the proprietary AlphaDEXu00ae selection process.

Goal

The primary investment goal of the First Trust Multi Cap Growth AlphaDEXu00ae Fund is to achieve long-term capital growth.

Investment Approach and Strategy

Strategy: This ETF does not track a specific index. Instead, it employs an active management strategy that utilizes the AlphaDEXu00ae methodology to identify and select stocks with favorable growth and value characteristics.

Composition The ETF invests primarily in common stocks of U.S. companies. The portfolio is diversified across various market capitalizations (large-cap, mid-cap, and small-cap) and sectors, with a focus on companies exhibiting strong growth potential.

Market Share: Data for specific market share of FNK within its niche is not readily available as it's an actively managed fund. Its market positioning is defined by its AlphaDEXu00ae methodology.

Total Net Assets (AUM): 1320000000

Key Competitors

• Vanguard Growth ETF (VUG)
• iShares Russell 1000 Growth ETF (IWF)
• Schwab U.S. Large-Cap Growth ETF (SCHG)

Competitive Landscape

The multi-cap growth ETF space is highly competitive, dominated by passively managed index-tracking ETFs. First Trust Multi Cap Growth AlphaDEXu00ae Fund differentiates itself through its proprietary AlphaDEXu00ae methodology, which offers a quantitative, factor-based approach to stock selection, aiming to outperform traditional growth indices. Its advantage lies in potential for alpha generation, while its disadvantage might be higher expense ratios and less transparency compared to passive ETFs, and the inherent risk of active management underperforming.

Historical Performance: [object Object]

Benchmark Comparison: The fund's performance is not benchmarked against a single, universally recognized index but rather aims to outperform broader growth equity markets due to its active stock selection. Performance typically is compared against a blend of growth indices or peer group averages.

Expense Ratio: 0.6

Average Trading Volume

The ETF exhibits moderate average trading volume, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for the ETF is generally tight, suggesting efficient trading and minimal transaction costs for most market participants.

Market Environment Factors

The ETF is influenced by macroeconomic factors such as interest rate movements, inflation, and overall economic growth, which impact corporate earnings and investor sentiment towards growth stocks. Sector-specific trends in technology, healthcare, and consumer discretionary, which are often overweight in growth portfolios, also play a significant role.

Growth Trajectory

The fund's growth trajectory is driven by its AlphaDEXu00ae selection process. Changes in strategy and holdings are dynamic and depend on the continuous re-evaluation of stocks based on the predefined growth and value metrics. The fund aims to adapt to evolving market conditions by rebalancing its portfolio as needed.

Competitive Edge

The First Trust Multi Cap Growth AlphaDEXu00ae Fund's primary competitive edge lies in its proprietary AlphaDEXu00ae methodology. This systematic, quantitative approach aims to identify and exploit inefficiencies in the market by ranking stocks based on specific growth and value factors, potentially leading to superior risk-adjusted returns. Its diversified approach across market caps also allows it to capture growth opportunities across the spectrum of U.S. equities, providing a different exposure than pure large-cap growth strategies.

Volatility

The ETF exhibits historical volatility characteristic of actively managed growth-oriented equity funds, which can be higher than broader market indices. Specific data points like standard deviation would be needed for precise measurement.

Market Risk

The fund is subject to market risk, as the value of its underlying equity holdings can decline due to adverse economic conditions, geopolitical events, or poor company performance. Specifically, its focus on growth stocks may lead to higher sensitivity to interest rate changes and shifts in investor sentiment towards riskier assets.

Ideal Investor Profile

The ideal investor for this ETF is one seeking long-term capital appreciation and who believes in a quantitative, factor-based approach to stock selection. Investors should have a moderate to high risk tolerance due to the growth-oriented nature of the portfolio and be comfortable with active management.

Market Risk

This ETF is best suited for long-term investors looking for growth potential. While active, its systematic approach may appeal to those who prefer a rules-based strategy over discretionary management. It is less suitable for short-term traders or those seeking purely passive index replication.

The First Trust Multi Cap Growth AlphaDEXu00ae Fund (FNK) is an actively managed ETF focused on U.S. common stocks identified by its proprietary AlphaDEXu00ae methodology for strong growth and value characteristics. It offers diversified exposure across market capitalizations and aims for long-term capital appreciation. While facing stiff competition from passive ETFs, its quantitative approach provides a potential avenue for alpha generation. Investors should possess a moderate to high risk tolerance and a long-term investment horizon.

Data Sources:

• First Trust Funds Website
• Financial Data Providers (e.g., Morningstar, Yahoo Finance)

Disclaimers:

This information is for educational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investing in ETFs involves risk, including the possible loss of principal. Consult with a qualified financial advisor before making any investment decisions.