First Trust China AlphaDEX® Fund (FCA)

Overview

The First Trust China AlphaDEXu00ae Fund (FCA) seeks investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the NASDAQ AlphaDEXu00ae China Index. The fund uses the AlphaDEXu00ae stock selection methodology to identify and select stocks from the NASDAQ China Index, aiming for alpha generation through a rules-based process.

Reputation and Reliability

First Trust is a well-established ETF issuer with a history of providing innovative and rules-based investment strategies.

Management Expertise

First Trust has a dedicated team of portfolio managers and analysts experienced in quantitative investing and ETF management.

Goal

To provide investment results that correspond generally to the price and yield, before fees and expenses, of the NASDAQ AlphaDEXu00ae China Index.

Investment Approach and Strategy

Strategy: The fund employs a proprietary AlphaDEXu00ae methodology, which selects and weights stocks based on growth factors including sales growth, price appreciation, and momentum, and value factors including book value to price, cash flow to price, and return on assets.

Composition The fund invests primarily in stocks of Chinese companies traded on major exchanges, with a focus on those exhibiting strong growth and value characteristics based on the AlphaDEXu00ae methodology.

Market Share: Data not reliably available.

Total Net Assets (AUM): 56650000

Key Competitors

• iShares MSCI China ETF (MCHI)
• Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR)
• KraneShares CSI China Internet ETF (KWEB)

Competitive Landscape

The Chinese equity ETF market is highly competitive, with several large funds tracking broad market indices or specific sectors. FCA differentiates itself through its AlphaDEXu00ae methodology, potentially offering superior risk-adjusted returns compared to market-cap weighted indices. However, the fund's active management strategy may result in higher expense ratios than passively managed competitors. FCA may have fewer assets under management (AUM) than its largest competitors.

Historical Performance: Historical performance data not available in structured format.

Benchmark Comparison: Performance data compared to benchmark not available in structured format.

Expense Ratio: 0.008

Average Trading Volume

The average trading volume of FCA indicates a moderate level of liquidity, facilitating relatively easy buying and selling of shares.

Bid-Ask Spread

The bid-ask spread for FCA is generally tight, reflecting its liquidity and indicating relatively low transaction costs.

Market Environment Factors

Economic growth in China, regulatory policies, and global market sentiment significantly influence the performance of FCA. Sector-specific growth prospects within the Chinese economy also impact the fund's holdings.

Growth Trajectory

FCA's growth trajectory is tied to the overall performance of the Chinese stock market and the success of its AlphaDEXu00ae methodology in identifying and selecting outperformers. Changes to the underlying index or selection criteria could impact future performance.

Competitive Edge

FCA's competitive advantage lies in its proprietary AlphaDEXu00ae methodology, which aims to select stocks based on a combination of growth and value factors, potentially leading to superior risk-adjusted returns. This rules-based approach differentiates it from passive, market-cap weighted ETFs. The fund's active management provides flexibility to adapt to changing market conditions. The differentiated approach can add value in volatile markets.

Volatility

The ETF is exposed to the volatility of the Chinese stock market, which can be higher than that of developed markets.

Market Risk

The fund's performance is subject to market risk, including fluctuations in the value of its underlying holdings due to economic, political, and company-specific factors affecting Chinese equities.

Ideal Investor Profile

The ideal investor for FCA is one seeking exposure to the Chinese equity market with a potential for enhanced returns through a rules-based active strategy. Investors with a higher risk tolerance and a longer-term investment horizon may find FCA suitable.

Market Risk

FCA is suitable for investors who are comfortable with the risks associated with investing in emerging markets and are seeking to outperform broad market indices. It may be less suitable for passive index followers or risk-averse investors.

The First Trust China AlphaDEXu00ae Fund (FCA) offers exposure to Chinese equities using a proprietary AlphaDEXu00ae methodology aimed at selecting outperformers. This strategy differentiates it from passive market-cap weighted ETFs, potentially leading to enhanced returns but also higher risk. The fund is suitable for investors with a higher risk tolerance and a longer-term investment horizon who are seeking to outperform broad market indices. However, the fund's success is heavily reliant on the effectiveness of the AlphaDEXu00ae methodology and the overall performance of the Chinese economy.

Data Sources:

• First Trust website
• ETF.com
• Morningstar

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Market share data is an estimate.