First Trust Large Cap Core AlphaDEX® Fund (FEX)

Overview

The First Trust Large Cap Core AlphaDEXu00ae Fund (FEX) seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called the NASDAQ AlphaDEXu00ae Large Cap Core Index. The fund focuses on large-cap U.S. stocks selected and weighted based on growth factors including sales growth, price appreciation, and momentum, as well as value factors including price to book value, price to cash flow, and return on assets. This fund offers a smart beta approach to core large-cap equity exposure.

Reputation and Reliability

First Trust is a well-established ETF issuer with a strong reputation for innovation and thematic investing.

Management Expertise

First Trust Advisors L.P. has a team of experienced portfolio managers and analysts focused on developing and managing innovative investment solutions.

Goal

To seek investment results that correspond generally to the price and yield of the NASDAQ AlphaDEXu00ae Large Cap Core Index.

Investment Approach and Strategy

Strategy: The fund aims to track the NASDAQ AlphaDEXu00ae Large Cap Core Index.

Composition The ETF holds a diversified portfolio of large-cap U.S. equities selected using the AlphaDEXu00ae methodology, which combines growth and value factors.

Market Share: The ETF holds a moderate market share within the large-cap core ETF segment.

Total Net Assets (AUM): 2210000000

Key Competitors

• iShares Core S&P 500 ETF (IVV)
• Vanguard S&P 500 ETF (VOO)
• SPDR S&P 500 ETF Trust (SPY)

Competitive Landscape

The large-cap core ETF market is dominated by a few very large, low-cost index funds. FEX's AlphaDEXu00ae methodology offers a different, potentially higher-return approach compared to passive indexing, but comes with a higher expense ratio. FEX can outperform during certain market conditions due to its unique weighting strategy but can also underperform. FEX has the advantage of potentially capturing more upside than market-cap weighted indexes, but carries the risk of greater volatility and tracking error.

Historical Performance: Historical performance data is not provided in this response.

Benchmark Comparison: Benchmark comparison is not provided in this response.

Expense Ratio: 0.06

Average Trading Volume

The average trading volume indicates moderate liquidity, making it relatively easy for investors to buy and sell shares.

Bid-Ask Spread

The bid-ask spread is generally tight, reflecting good liquidity and minimizing trading costs.

Market Environment Factors

Economic indicators, interest rate changes, and market sentiment can affect FEX's performance since it invests in large cap companies. Sector-specific growth prospects, such as technology or consumer discretionary, also influence the fund's holdings and overall performance.

Growth Trajectory

The fund's growth trajectory depends on the continued effectiveness of its AlphaDEXu00ae methodology and investor demand for smart beta strategies. Changes in the index methodology and sector allocation can also affect its growth.

Competitive Edge

FEX's competitive edge lies in its AlphaDEXu00ae methodology, which uses a quantitative, rules-based approach to select and weight stocks based on growth and value factors. This strategy aims to outperform traditional market-cap weighted indexes by identifying companies with strong fundamentals and momentum. The ETF's distinctive selection process and weighting scheme provide a unique approach compared to passive ETFs. This smart beta approach can attract investors seeking higher returns than standard market-cap weighted funds.

Volatility

Volatility is comparable to other large cap ETFs, but can be slightly higher due to the active stock selection process.

Market Risk

The fund is exposed to market risk, which includes general economic conditions, interest rate changes, and investor sentiment impacting stock prices. The underlying assets carry the risk that their growth and value factors may not perform as expected.

Ideal Investor Profile

The ideal investor is seeking enhanced returns compared to traditional market-cap weighted indexes and is comfortable with a slightly higher expense ratio for an actively managed approach.

Market Risk

FEX is suitable for long-term investors seeking to outperform the broader market and are comfortable with moderate risk.

The First Trust Large Cap Core AlphaDEXu00ae Fund (FEX) offers a smart beta approach to large-cap investing, aiming to outperform traditional market-cap weighted indexes through its unique AlphaDEXu00ae methodology. While it carries a slightly higher expense ratio than passive index funds, it offers the potential for enhanced returns. Investors should be aware of the market risk and volatility associated with equity investments. The fund is suitable for long-term investors seeking exposure to large-cap stocks with a focus on growth and value factors.

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. Investment decisions should be made based on your own research and risk tolerance.