First Trust Europe AlphaDEX® Fund (FEP)

Overview

The First Trust Europe AlphaDEXu00ae Fund (FEP) seeks investment results that correspond to the AlphaDEXu00ae Europe Index. It focuses on European equities selected and weighted based on growth factors including sales growth, price appreciation, and momentum, plus value factors including book value to price, cash flow to price, and return on assets.

Reputation and Reliability

First Trust is a well-established ETF provider with a strong reputation. They offer a wide range of ETFs across various asset classes and investment strategies.

Management Expertise

First Trust has a team of experienced investment professionals dedicated to managing and overseeing their ETF offerings. They have a solid track record in the ETF market.

Goal

To seek investment results that correspond to the AlphaDEXu00ae Europe Index.

Investment Approach and Strategy

Strategy: The fund uses a quantitative, rules-based approach to select and weight European equities based on a combination of growth and value factors.

Composition The ETF primarily holds stocks of European companies. The sector allocation can vary based on the AlphaDEX methodology.

Market Share: Market share data for FEP within its specific European equity factor-based category can vary and require specialized data sources. This data is estimated based on AUM and competitor analysis.

Total Net Assets (AUM): 56300000

Key Competitors

• IEUR
• VGK
• EZU
• HEDJ

Competitive Landscape

The European equity ETF market is highly competitive, with numerous funds offering exposure to different regions, sectors, and investment styles. FEP's AlphaDEX methodology aims to outperform traditional market-cap weighted indexes. However, its factor-based approach may underperform in certain market environments compared to broad-based ETFs like IEUR and VGK. Competitors benefit from higher liquidity and recognition.

Historical Performance: Historical performance requires specific data queries. Look for past returns spanning 1-year, 3-year, 5-year, and 10-year periods.

Benchmark Comparison: Compare FEP's performance to its underlying AlphaDEXu00ae Europe Index and broad European equity benchmarks like the MSCI Europe Index to assess its tracking efficiency and relative performance.

Expense Ratio: 0.58

Average Trading Volume

The ETF's liquidity is moderate, facilitating daily trading for most investors.

Bid-Ask Spread

The bid-ask spread is usually competitive, but it can widen during periods of high market volatility.

Market Environment Factors

European economic conditions, interest rates, political stability, and currency fluctuations can significantly impact FEP's performance. Sector-specific trends in Europe will also affect returns.

Growth Trajectory

FEP's growth trajectory depends on the performance of its underlying holdings and the effectiveness of the AlphaDEX methodology in identifying and selecting high-potential European companies.

Competitive Edge

FEP's AlphaDEX methodology differentiates it from traditional market-cap weighted European equity ETFs. The fund uses a rules-based approach that selects and weights companies based on both growth and value factors, potentially leading to outperformance. This unique strategy may appeal to investors seeking a more active and factor-driven approach to European equity investing. First Trust's solid reputation provides credibility.

Volatility

FEP's volatility is influenced by the volatility of the European equity market and its factor-based investment strategy. Expect moderate levels of fluctuations.

Market Risk

FEP is exposed to market risk associated with European equities, including economic downturns, political instability, and currency risk. Specific sector risks also exist depending on the fund's holdings.

Ideal Investor Profile

The ideal investor is seeking exposure to European equities with a factor-based investment strategy, potentially outperforming traditional market-cap weighted indexes, and is comfortable with moderate volatility.

Market Risk

FEP is suitable for long-term investors who want to diversify their portfolio with European equities and believe in the potential of the AlphaDEX methodology. It may be less suitable for extremely risk-averse investors or those seeking pure passive index tracking.

The First Trust Europe AlphaDEXu00ae Fund (FEP) offers a unique approach to European equity investing through its AlphaDEX methodology, which selects and weights companies based on growth and value factors. This strategy aims to outperform traditional market-cap weighted indexes, providing potential for enhanced returns. However, its factor-based approach carries its own set of risks, and investors should be comfortable with moderate volatility. FEP is a suitable option for those seeking active management within the European equity space and diversification from broader market ETFs.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be based on your own research and risk tolerance.