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

Overview

The First Trust Developed Markets ex-US Small Cap AlphaDEXu00ae Fund (FDT) is an ETF that seeks investment results that correspond to the AlphaDEXu00ae Developed Markets ex-US Small Cap Index. It employs a stock selection process designed to generate alpha relative to traditional market-cap weighted indices.

Reputation and Reliability

First Trust is a well-established ETF provider with a reputation for innovation and offering unique investment strategies.

Management Expertise

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

Goal

To track the performance, before fees and expenses, of the AlphaDEXu00ae Developed Markets ex-US Small Cap Index.

Investment Approach and Strategy

Strategy: The fund uses a proprietary AlphaDEXu00ae methodology, which ranks stocks based on growth and value factors to select and weight holdings.

Composition The ETF primarily holds stocks of small-cap companies located in developed countries outside the United States.

Market Share: Data on precise market share is variable and may not be readily available. Estimated market share in the specific developed ex-US small cap segment is in the single digits percentage.

Total Net Assets (AUM): 327300000

Key Competitors

• SPDRu00ae Bloomberg Barclays International Treasury Bond ETF (BWX)
• Vanguard FTSE All-World ex-US Small-Cap ETF (VSS)
• iShares Core MSCI EAFE ETF (IEFA)

Competitive Landscape

The competitive landscape consists of other developed ex-US small-cap ETFs and broader international equity ETFs. FDT's AlphaDEXu00ae methodology differentiates it, but its performance depends on the success of this strategy. Competitors often offer lower expense ratios and higher AUM.

Historical Performance: Historical performance varies based on market conditions and AlphaDEXu00ae strategy effectiveness. Specific numerical data would need to be retrieved from financial data providers.

Benchmark Comparison: Performance is typically compared to the AlphaDEXu00ae Developed Markets ex-US Small Cap Index.

Expense Ratio: 0.8

Average Trading Volume

The average trading volume of FDT is moderate, which can impact ease of entry and exit for larger trades.

Bid-Ask Spread

The bid-ask spread typically reflects the liquidity of the underlying small-cap holdings; the spread varies based on market conditions.

Market Environment Factors

Economic growth in developed markets ex-US, currency fluctuations, and global trade dynamics influence FDT's performance.

Growth Trajectory

Growth depends on the effectiveness of the AlphaDEXu00ae strategy in identifying undervalued small-cap stocks in developed markets. Changes to the strategy and holdings are not typically frequent or radical.

Competitive Edge

FDT's primary advantage is its proprietary AlphaDEXu00ae methodology, designed to outperform market-cap weighted indices. This active stock selection process aims to identify undervalued small-cap stocks with strong growth potential. Its focus on developed markets excluding the US also offers diversification benefits. However, the higher expense ratio may be a disadvantage compared to passively managed ETFs.

Volatility

Being a small-cap focused fund, FDT generally exhibits higher volatility compared to broader market ETFs.

Market Risk

Exposure to foreign markets introduces currency risk and political/economic risks specific to those countries.

Ideal Investor Profile

Investors seeking exposure to developed ex-US small-cap equities with the potential for alpha generation and willing to accept higher volatility.

Market Risk

FDT is more suitable for long-term investors with a higher risk tolerance and the willingness to potentially benefit from active stock selection.

The First Trust Developed Markets ex-US Small Cap AlphaDEXu00ae Fund (FDT) offers exposure to small-cap companies in developed markets outside the US, using a proprietary AlphaDEXu00ae selection methodology aiming to generate alpha. While it can provide diversification and potential outperformance, investors should consider its higher expense ratio and the inherent volatility of small-cap stocks and international markets. It is suited for long-term investors seeking active management in this segment and with a higher risk tolerance. The fund's success hinges on the effectiveness of the AlphaDEXu00ae strategy in identifying and weighting promising companies.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

This analysis is for informational purposes only and does not constitute investment advice. Investment decisions should be made based on individual circumstances and after consulting with a qualified financial advisor. Market share data is estimated and may vary. Past performance is not indicative of future results.