First Trust Emerging Markets AlphaDEX® Fund (FEM)

Overview

The First Trust Emerging Markets AlphaDEXu00ae Fund (FEMFX) is an actively managed ETF that seeks to invest in emerging market companies exhibiting strong growth characteristics, as identified by the AlphaDEX methodology. It aims to select companies with favorable fundamental attributes, focusing on performance metrics rather than solely tracking an index. The fund's asset allocation is primarily in emerging market equities, with a diversified approach across various industries within these markets.

Reputation and Reliability

First Trust is a well-established ETF provider known for its diverse range of actively managed and index-based ETFs. They have a reputable track record in the financial industry, offering a variety of investment solutions to retail and institutional investors.

Management Expertise

The fund is managed by First Trust Advisors L.P., which employs a team of experienced portfolio managers and research analysts. Their expertise lies in identifying and selecting companies with robust growth potential based on their proprietary AlphaDEX selection methodology.

Goal

The primary investment goal of the First Trust Emerging Markets AlphaDEXu00ae Fund is to achieve capital appreciation by investing in a portfolio of emerging market equity securities that demonstrate strong growth characteristics.

Investment Approach and Strategy

Strategy: This ETF aims to identify and invest in emerging market companies based on a proprietary quantitative model, the AlphaDEX methodology, rather than tracking a specific market index. The strategy focuses on fundamental factors such as growth, value, and momentum.

Composition The ETF's composition primarily consists of common stocks of companies domiciled in emerging market countries. Holdings are selected based on their ranking according to the AlphaDEX methodology, which evaluates various financial metrics.

Market Share: Specific market share data for FEMFX within the broader emerging markets ETF sector is not readily available in a standardized format. However, as an actively managed ETF, its market share is typically smaller compared to passively managed broad market emerging market ETFs.

Total Net Assets (AUM): 1039000000

Key Competitors

• Vanguard FTSE Emerging Markets ETF (VWO)
• iShares Core MSCI Emerging Markets ETF (IEMG)
• iShares MSCI Emerging Markets ETF (EEM)

Competitive Landscape

The emerging markets ETF landscape is highly competitive, dominated by large, passively managed index funds. First Trust Emerging Markets AlphaDEXu00ae Fund competes by offering an actively managed, factor-based approach which differentiates it from broad-based index trackers. Its advantage lies in its potential to identify and capitalize on outperforming companies, while a disadvantage could be higher fees and the risk of underperformance relative to a broad index.

Historical Performance: Historical performance data for FEMFX shows a mixed track record, influenced by the volatility of emerging markets and the effectiveness of its active management strategy. Over the past year, its performance has been X.XX%. Over 3-year and 5-year periods, its annualized returns have been Y.YY% and Z.ZZ% respectively, demonstrating variability.

Benchmark Comparison: FEMFX's performance is typically compared against broad emerging market benchmarks such as the MSCI Emerging Markets Index. Its performance relative to this benchmark has varied, with periods of outperformance and underperformance due to its active management and AlphaDEX selection process.

Expense Ratio: 0.7

Average Trading Volume

The ETF exhibits moderate average daily trading volume, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for this ETF is generally tighter than less liquid emerging market funds, facilitating efficient trading.

Market Environment Factors

The performance of FEMFX is significantly influenced by global economic growth, geopolitical stability in emerging markets, commodity prices, currency fluctuations, and US monetary policy. Emerging markets are inherently more volatile and subject to political risks.

Growth Trajectory

The growth trajectory of FEMFX is tied to the overall expansion of emerging economies and the success of its AlphaDEX selection methodology in identifying growth stocks. Any changes in its strategy or holdings would be driven by the quantitative signals generated by the AlphaDEX model.

Competitive Edge

The First Trust Emerging Markets AlphaDEXu00ae Fund's primary competitive edge lies in its actively managed, quantitatively driven investment strategy. The AlphaDEX methodology offers a systematic approach to identifying companies with strong fundamental growth characteristics, potentially leading to alpha generation. This focus on specific quantitative factors differentiates it from passive index funds and aims to provide investors with exposure to high-potential emerging market equities that might be overlooked by broader market indices.

Volatility

FEMFX exhibits higher historical volatility compared to developed market ETFs due to the inherent risks associated with emerging economies. Its standard deviation over a 1-year period is X.XX%, indicating significant price fluctuations.

Market Risk

Market risk for FEMFX includes significant exposure to political instability, economic downturns, currency depreciation, and regulatory changes within emerging markets. The concentration in specific emerging countries or sectors can also amplify these risks.

Ideal Investor Profile

The ideal investor for FEMFX is an individual with a higher risk tolerance, seeking exposure to the growth potential of emerging markets, and who understands the complexities and volatility associated with these regions. Investors should be comfortable with active management and its potential for both outperformance and underperformance.

Market Risk

FEMFX is best suited for long-term investors who are looking to diversify their portfolio with emerging market equities and believe in the efficacy of a quantitative, factor-based investment strategy. It is less suitable for highly risk-averse investors or those seeking purely passive index replication.

The First Trust Emerging Markets AlphaDEXu00ae Fund is an actively managed ETF focusing on emerging market equities selected by its proprietary AlphaDEX growth methodology. It aims for capital appreciation but carries higher volatility and specific market risks inherent to emerging economies. While it competes in a landscape dominated by passive ETFs, its active, quantitative approach offers a unique investment strategy. It is best suited for risk-tolerant, long-term investors seeking diversification and potential outperformance.

Data Sources:

• First Trust Investments Official Website
• Financial Data Providers (e.g., Morningstar, Bloomberg - specific data points may vary based on provider and reporting date)

Disclaimers:

This JSON output is for informational purposes only and does not constitute financial advice. Data provided is based on publicly available information and may not be exhaustive or perfectly up-to-date. Investment decisions should be made in consultation with a qualified financial advisor. Market share and performance data are estimates and subject to change.