First Trust Multi Cap Growth AlphaDEX® Fund (FAD)

Overview

The First Trust Multi Cap Growth AlphaDEXu00ae Fund (FAD) is an ETF that seeks investment results that correspond generally to the price and yield of an equity index called the NASDAQ AlphaDEXu00ae Multi Cap Growth Index. The fund focuses on multi-cap growth stocks selected based on growth factors.

Reputation and Reliability

First Trust is a well-established ETF provider known for its innovative and structured products.

Management Expertise

First Trust has a experienced management team with a strong track record in developing and managing ETFs.

Goal

To track the NASDAQ AlphaDEXu00ae Multi Cap Growth Index and provide capital appreciation.

Investment Approach and Strategy

Strategy: The fund employs an AlphaDEXu00ae methodology, which selects stocks based on growth factors. It does not passively track a market-cap weighted index.

Composition Primarily holds growth stocks across the multi-cap spectrum (mid, small, and micro-cap stocks).

Market Share: Data unavailable.

Total Net Assets (AUM): 145380000

Key Competitors

• IWO
• VUG
• SCHG

Competitive Landscape

The ETF industry is highly competitive. FAD differentiates itself through its AlphaDEXu00ae selection methodology which selects stocks based on growth factors, a potentially advantageous approach in specific market conditions. However, it may underperform compared to market-cap weighted indexes during bull markets, and its focused strategy might limit diversification compared to broader market ETFs.

Historical Performance: Historical performance data can be obtained from financial websites. (e.g., Morningstar, Yahoo Finance)

Benchmark Comparison: Compare FAD's performance against the NASDAQ AlphaDEXu00ae Multi Cap Growth Index to evaluate its tracking efficiency.

Expense Ratio: 0.7

Average Trading Volume

The average trading volume of FAD is moderate, providing sufficient liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for FAD can vary based on market conditions but is generally reasonable.

Market Environment Factors

Economic growth, interest rates, and investor sentiment towards growth stocks impact FAD. Sector growth prospects in areas like technology, healthcare, and consumer discretionary influence FAD's underlying holdings.

Growth Trajectory

Growth depends on the performance of the underlying holdings, which are selected based on AlphaDEX growth factors. Changes in market capitalization or growth characteristic can lead to adjustments to strategy and holdings.

Competitive Edge

FAD's competitive advantage lies in its proprietary AlphaDEXu00ae methodology, which offers a systematic approach to identifying growth stocks. The fund's focus on multi-cap growth differentiates it from broad market ETFs and other growth-focused funds. This unique strategy attracts investors seeking differentiated factor exposure. However, success depends on the effectiveness of the AlphaDEXu00ae methodology in varying market environments and if growth investing is out of favor the fund may underperform compared to other market ETFs.

Volatility

FAD's volatility is expected to be relatively high due to its focus on growth stocks, which tend to be more sensitive to market fluctuations. Investors should also consider the fund's exposure to smaller market caps.

Market Risk

FAD is subject to market risk, meaning its value can decline due to overall market conditions or specific sector downturns. Given its growth focus, it can be more vulnerable during economic slowdowns.

Ideal Investor Profile

The ideal investor for FAD is one who seeks capital appreciation and is comfortable with higher volatility and the risks associated with growth stocks and smaller cap companies.

Market Risk

FAD may be suitable for long-term investors with a higher risk tolerance and a preference for growth-oriented investments. Active traders might use FAD to capitalize on short-term growth opportunities.

First Trust Multi Cap Growth AlphaDEXu00ae Fund (FAD) aims to deliver capital appreciation by investing in multi-cap growth stocks selected using a proprietary AlphaDEXu00ae methodology. The fund is suitable for investors with a higher risk tolerance who are looking for differentiated factor exposure in the growth segment. Its performance depends on the efficacy of the AlphaDEXu00ae strategy and market conditions favoring growth stocks. The fund's expense ratio of 0.70% is moderate, and investors should assess its historical performance against the benchmark and other growth ETFs. It is worth noting market share data is unavailable for the purposes of the summary and risk analysis.

Data Sources:

• First Trust website
• Morningstar
• Yahoo Finance
• ETF.com

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered financial advice. Investment decisions should be based on individual circumstances and consultation with a qualified financial advisor.