First Trust Emerging Markets Small Cap AlphaDEX® Fund (FEMS)

Overview

The First Trust Emerging Markets Small Cap AlphaDEXu00ae Fund (FEMS) seeks investment results that correspond to the performance of the NASDAQ AlphaDEXu00ae Emerging Markets Small Cap Index. The fund uses a ranking methodology to select and weight small-cap stocks from emerging markets based on growth and value factors.

Reputation and Reliability

First Trust is a well-established ETF provider with a strong reputation for innovation and a long track record of managing various ETF strategies.

Management Expertise

First Trust has an experienced team of portfolio managers and analysts specializing in ETF management and quantitative investing.

Goal

To seek investment results that correspond to the price and yield, before fees and expenses, of the NASDAQ AlphaDEXu00ae Emerging Markets Small Cap Index.

Investment Approach and Strategy

Strategy: The fund employs an AlphaDEXu00ae methodology, which ranks potential holdings based on growth and value factors, selecting the top-ranked stocks.

Composition The ETF primarily holds small-cap stocks from emerging markets.

Market Share: Unavailable

Total Net Assets (AUM): 188740720

Key Competitors

• iShares MSCI Emerging Markets Small-Cap ETF (EEMS)
• Columbia Emerging Markets Small Cap Equity ETF (EESM)
• SPDR S&P Emerging Markets Small Cap ETF (EWX)

Competitive Landscape

The emerging markets small-cap ETF market is relatively competitive. FEMS differentiates itself through its AlphaDEXu00ae methodology, which may lead to different performance compared to market-cap-weighted competitors. However, this active strategy can also result in higher volatility.

Historical Performance: Historical performance data is readily available on financial websites, but specific numerical data should be pulled from live sources.

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

Expense Ratio: 0.78

Average Trading Volume

Average trading volume can vary but generally indicates reasonable liquidity for an ETF of this size.

Bid-Ask Spread

The bid-ask spread typically reflects the ETF's liquidity and demand, and it can fluctuate based on market conditions.

Market Environment Factors

Emerging market economic growth, trade policies, and geopolitical events can significantly impact the fund's performance. Currency fluctuations in emerging markets also play a crucial role.

Growth Trajectory

The fund's growth is dependent on the performance of emerging market small-cap stocks and the effectiveness of the AlphaDEXu00ae methodology in selecting and weighting stocks.

Competitive Edge

FEMS' competitive advantage lies in its proprietary AlphaDEXu00ae methodology, which seeks to identify companies with strong growth and value characteristics. This active selection approach has the potential to outperform passively managed emerging market small-cap ETFs. However, the fund is more expensive than competitor ETFs due to the stock selection process. The index that is being tracked has proven to provide alpha versus simple capitalization weighted ETFs.

Volatility

Emerging market small-cap stocks can exhibit higher volatility compared to developed market large-cap stocks. FEMS' active strategy could further amplify volatility.

Market Risk

The fund is subject to emerging market risks, including political instability, currency risk, and regulatory changes, which can impact stock prices and overall fund performance.

Ideal Investor Profile

FEMS is suitable for investors seeking exposure to emerging market small-cap stocks and who are willing to accept higher volatility in pursuit of potentially higher returns.

Market Risk

FEMS may be best suited for long-term investors with a higher risk tolerance who are looking to diversify their portfolios with emerging market small-cap exposure.

First Trust Emerging Markets Small Cap AlphaDEXu00ae Fund (FEMS) offers a unique approach to emerging market small-cap investing through its AlphaDEXu00ae methodology. This active strategy aims to outperform traditional market-cap-weighted indexes by selecting stocks based on growth and value factors. However, this active approach comes with a higher expense ratio and the potential for increased volatility. FEMS is best suited for investors with a long-term investment horizon and a higher risk tolerance seeking enhanced returns from emerging markets.

Data Sources:

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

Disclaimers:

The data provided is for informational purposes only and should not be considered financial advice. Past performance is not indicative of future results. Investors should consult with a financial advisor before making any investment decisions. Market share data may be unavailable or estimated based on available resources.