First Trust Emerging Markets AlphaDEX® Fund (FEM)

Overview

The First Trust Emerging Markets AlphaDEXu00ae Fund (FEM) seeks investment results that correspond generally to the price and yield of an equity index called the NASDAQ AlphaDEXu00ae Emerging Markets Index. It focuses on emerging market equities selected and weighted based on growth factors.

Reputation and Reliability

First Trust is a well-established ETF issuer with a solid reputation. They are known for their AlphaDEX methodology.

Management Expertise

First Trust has a dedicated team of investment professionals with experience in managing ETFs and implementing the AlphaDEX strategy.

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 methodology to select and weight stocks based on growth and value factors within the emerging markets universe.

Composition Primarily holds equities of companies located in emerging market countries.

Market Share: FEM's market share varies and depends on the specific emerging markets ETF segment considered.

Total Net Assets (AUM): 315374741.19

Key Competitors

• VWO
• IEMG
• EEM

Competitive Landscape

The emerging markets ETF landscape is highly competitive, with large, established funds like VWO and IEMG dominating. FEM differentiates itself through its AlphaDEX methodology, aiming to outperform market-cap weighted indices. This methodology can lead to higher potential returns but also increased volatility compared to broad market ETFs.

Historical Performance: Historical performance can be obtained from financial data providers and should be analyzed over various time periods (e.g., 1-year, 3-year, 5-year, 10-year).

Benchmark Comparison: FEM's performance should be compared to the NASDAQ AlphaDEXu00ae Emerging Markets Index, as well as broader emerging market indices like the MSCI Emerging Markets Index.

Expense Ratio: 0.8

Average Trading Volume

FEM generally demonstrates moderate liquidity, as evidenced by its average trading volume.

Bid-Ask Spread

The bid-ask spread for FEM is typically reasonable, reflecting its liquidity and investor interest.

Market Environment Factors

Economic growth in emerging markets, currency fluctuations, trade policies, and geopolitical events significantly impact FEM's performance.

Growth Trajectory

FEM's growth trajectory depends on the performance of its AlphaDEX methodology and the overall health of the emerging markets it invests in. Changes in sector allocation and country exposure within the index can also influence its growth.

Competitive Edge

FEM's competitive advantage lies in its AlphaDEX methodology, which aims to identify and overweight companies with strong growth characteristics. This quantitative approach provides a systematic and potentially more efficient way to select stocks compared to traditional market-cap weighted indices. The fund's targeted approach can lead to better risk-adjusted returns, especially in certain market environments. However, this strategy may not always outperform broad market benchmarks and can result in higher turnover and potentially higher tax implications.

Volatility

FEM's volatility is likely to be higher than broad market ETFs due to its focus on emerging markets and its AlphaDEX methodology.

Market Risk

FEM is subject to emerging market risks, including political instability, currency risk, and economic volatility in the countries in which it invests.

Ideal Investor Profile

FEM is suitable for investors seeking exposure to emerging markets with the potential for higher returns through a factor-based strategy. Investors should be comfortable with higher volatility and understand the risks associated with emerging markets.

Market Risk

FEM is best suited for long-term investors who are willing to tolerate higher volatility in exchange for potentially higher returns. It may not be ideal for risk-averse investors or those seeking stable income.

The First Trust Emerging Markets AlphaDEXu00ae Fund (FEM) offers exposure to emerging market equities through a unique AlphaDEX methodology that aims to outperform market-cap weighted indices. The fund's focus on growth and value factors can potentially lead to higher returns but also increases volatility. FEM is best suited for long-term investors seeking emerging market exposure and willing to tolerate higher risk. Its expense ratio and liquidity are important considerations for investors.

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 may vary depending on the source and calculation methodology.