First Trust Developed Markets ex-US Small Cap AlphaDEX® Fund (FDTS)

Overview

The First Trust Developed Markets ex-US Small Cap AlphaDEXu00ae Fund (FDT) seeks investment results that correspond to the performance of the NASDAQ AlphaDEXu00ae Developed Markets Ex-US Small Cap Index. It focuses on small-cap stocks in developed markets outside the U.S. and uses a quantitative methodology to select and weight stocks.

Reputation and Reliability

First Trust is a well-established ETF provider with a reputation for innovative and actively managed ETFs.

Management Expertise

First Trust has extensive experience in managing ETFs across various asset classes and investment strategies.

Goal

To provide investment results that correspond to the price and yield of an equity index called the NASDAQ AlphaDEXu00ae Developed Markets Ex-US Small Cap Index.

Investment Approach and Strategy

Strategy: The ETF employs a quantitative, rules-based methodology (AlphaDEXu00ae) to select and weight stocks within the index it tracks.

Composition The fund primarily holds small-cap equities from developed markets outside the United States.

Market Share: FDT's market share within the developed markets ex-US small-cap ETF category is notable but not dominant.

Total Net Assets (AUM): 68520000

Key Competitors

• SPDRu00ae MSCI EAFE Small Cap ETF (SCZ)
• Vanguard FTSE All-World ex-US Small-Cap ETF (VSS)
• iShares Core MSCI EAFE ETF (IEFA)

Competitive Landscape

The competitive landscape is dominated by larger, passively managed ETFs from providers like Vanguard and BlackRock (iShares). FDT's advantage lies in its active, quantitative stock selection, potentially offering outperformance relative to passive benchmarks. The disadvantage is higher expense ratio.

Historical Performance: Historical performance varies based on market conditions and the effectiveness of the AlphaDEXu00ae methodology. (Data omitted due to inability to dynamically fetch data)

Benchmark Comparison: Performance should be compared to the NASDAQ AlphaDEXu00ae Developed Markets Ex-US Small Cap Index and broader developed market ex-US small-cap benchmarks. (Data omitted due to inability to dynamically fetch data)

Expense Ratio: 0.8

Average Trading Volume

FDT's average trading volume is moderate, which may impact trade execution for large orders. (Data omitted due to inability to dynamically fetch data)

Bid-Ask Spread

The bid-ask spread is typically moderate, reflecting the fund's liquidity and trading activity. (Data omitted due to inability to dynamically fetch data)

Market Environment Factors

Economic growth in developed markets ex-US, interest rate policies, and currency fluctuations influence FDT's performance.

Growth Trajectory

The growth trajectory depends on the continued adoption of actively managed ETFs and the fund's ability to outperform its benchmark.

Competitive Edge

FDTu2019s competitive edge lies in its proprietary AlphaDEXu00ae methodology, a quantitative approach that aims to select stocks with strong growth characteristics. It offers exposure to a segment of the market (developed ex-US small-cap) that may be underrepresented in broad market ETFs. The methodology has the potential to generate alpha relative to passively managed ETFs. However, its higher expense ratio can be a disadvantage compared to these passive options.

Volatility

FDT's volatility is expected to be higher than broader market ETFs due to its focus on small-cap stocks.

Market Risk

The fund is subject to market risk, including economic downturns and geopolitical events in developed markets outside the U.S.

Ideal Investor Profile

Investors seeking exposure to developed markets ex-US small-cap stocks with a focus on growth potential and a willingness to accept higher volatility.

Market Risk

Suitable for investors with a moderate to long-term investment horizon who are comfortable with active management and its associated costs.

First Trust Developed Markets ex-US Small Cap AlphaDEXu00ae Fund (FDT) offers exposure to a portfolio of small-cap companies in developed markets outside the U.S. using a quantitative, rules-based approach. Its active management strategy seeks to outperform passive benchmarks. However, it has a higher expense ratio than its competitors. Investors should be aware of the higher volatility associated with small-cap stocks and the risks of international investing.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

Data and analysis provided are for informational purposes only and should not be considered investment advice. Market share data may be approximate and based on publicly available information. Performance data is not a guarantee of future results.