First Trust Emerging Markets AlphaDEX® Fund (FEM)

Overview

The First Trust Emerging Markets AlphaDEXu00ae Fund (FXH) seeks investment results that correspond generally to the price and yield of an equity index called the NASDAQ AlphaDEXu00ae Emerging Markets Index. It aims to identify and rank stocks in emerging markets based on growth factors including sales, price appreciation, and momentum, as well as value factors such as book value to price, cash flow to price, and return on assets.

Reputation and Reliability

First Trust is a well-established ETF issuer with a solid reputation for providing innovative investment solutions and a strong track record.

Management Expertise

First Trust has a team of experienced portfolio managers and analysts dedicated to managing its suite of ETFs, with expertise in various investment strategies and asset classes.

Goal

To provide investment results that correspond generally to the price and yield of the NASDAQ AlphaDEXu00ae Emerging Markets Index.

Investment Approach and Strategy

Strategy: The fund uses a quantitative, rules-based approach to select and weight stocks in emerging markets based on growth and value factors. It does not passively track a market-cap weighted index.

Composition The ETF primarily holds stocks of companies located in emerging market countries.

Market Share: Data Not Available

Total Net Assets (AUM): 425000000

Key Competitors

• Vanguard FTSE Emerging Markets ETF (VWO)
• iShares Core MSCI Emerging Markets ETF (IEMG)
• Schwab Emerging Markets Equity ETF (SCHE)

Competitive Landscape

The emerging market ETF landscape is dominated by a few large, low-cost providers like Vanguard and iShares. FXH's AlphaDEXu00ae methodology aims for enhanced returns through a quantitative stock selection process, potentially outperforming market-cap weighted ETFs, but with higher expense and risk.

Historical Performance: Historical performance data is available from various financial data providers. Consult these resources for past returns.

Benchmark Comparison: The ETF's performance should be compared to the NASDAQ AlphaDEXu00ae Emerging Markets Index to assess its tracking effectiveness.

Expense Ratio: 0.8

Average Trading Volume

The ETF's average daily trading volume can be obtained from financial data providers, indicating its liquidity.

Bid-Ask Spread

Bid-ask spread information is available from real-time market data feeds and reflects the cost of immediate execution.

Market Environment Factors

Economic growth in emerging markets, currency fluctuations, trade policies, and geopolitical events significantly impact FXH.

Growth Trajectory

Changes in the underlying AlphaDEXu00ae methodology, sector allocations within the emerging markets, and fund flows will impact FXH's future growth trajectory.

Competitive Edge

FXH's competitive edge lies in its proprietary AlphaDEXu00ae methodology, which aims to identify and rank stocks based on a combination of growth and value factors. This rules-based approach seeks to deliver potentially superior returns compared to traditional market-cap weighted emerging market ETFs. The fund's quantitative strategy distinguishes it from passively managed funds and provides a systematic approach to stock selection. This focus on growth and value factors can appeal to investors seeking alpha generation in the emerging markets space.

Volatility

Emerging market investments tend to exhibit higher volatility compared to developed markets. FXH's volatility will reflect the risks associated with its underlying emerging market holdings.

Market Risk

Specific risks include currency risk, political risk, economic instability, and regulatory changes within the emerging market countries where FXH invests.

Ideal Investor Profile

FXH is suited for investors seeking exposure to emerging markets with the potential for enhanced returns through a quantitative stock selection methodology and those who are comfortable with higher volatility.

Market Risk

FXH may be suitable for long-term investors with a higher risk tolerance, seeking to diversify their portfolios with emerging market equities and potentially outperform market-cap weighted indexes.

First Trust Emerging Markets AlphaDEXu00ae Fund (FXH) offers exposure to emerging markets through a unique, quantitative AlphaDEXu00ae methodology that selects stocks based on growth and value factors. This approach aims to deliver potentially superior returns compared to market-cap weighted ETFs but involves higher volatility and expense. It is suitable for investors seeking diversification in emerging markets and willing to take on additional risk for the potential of outperformance. However, its historical performance and market dynamics must be carefully considered for a comprehensive investment decision. Due Diligence of FXH and its AlphaDEX methodology should be done before investing.

Data Sources:

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

Disclaimers:

The data and analysis provided are for informational purposes only and do not constitute financial advice. Investment decisions should be made after consulting with a qualified financial advisor and conducting thorough due diligence. Market share data is not always easily available and some values could have some amount of error.