First Trust Germany AlphaDEX® Fund (FGM)

Overview

The First Trust Germany AlphaDEXu00ae Fund (FGM) seeks investment results that correspond generally to the price and yield of the AlphaDEXu00ae Germany Index. The fund aims to identify and rank German stocks 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. It focuses on providing exposure to the German equity market while utilizing a quantitative methodology to select and weight stocks.

Reputation and Reliability

First Trust is a well-established ETF issuer with a long track record and a reputation for innovation in the ETF market.

Management Expertise

First Trust has a dedicated team of investment professionals with experience in quantitative analysis and index-based investing.

Goal

To provide investment results that correspond generally to the price and yield of the AlphaDEXu00ae Germany Index.

Investment Approach and Strategy

Strategy: The fund uses an AlphaDEXu00ae methodology, which is a quantitative, rules-based approach to select and weight German equities.

Composition The fund primarily holds German stocks selected based on growth and value factors.

Market Share: The First Trust Germany AlphaDEXu00ae Fund's market share within the Germany-focused ETF space is moderate.

Total Net Assets (AUM): 66620000

Key Competitors

• iShares MSCI Germany ETF (EWG)
• Xtrackers Germany Equity ETF (GRMN)
• Franklin FTSE Germany ETF (FLGR)

Competitive Landscape

The Germany-focused ETF market is dominated by iShares MSCI Germany ETF (EWG). FGM differentiates itself through its AlphaDEXu00ae methodology, which seeks to outperform traditional market-cap-weighted indexes. However, this approach may also result in higher volatility and tracking error compared to broader market ETFs. Compared to its competitors, FGM's value and growth factor focus provide potentially higher returns in the long-term.

Historical Performance: Historical performance data should be obtained from reliable financial data providers to accurately represent the ETF's track record. Past performance does not guarantee future results.

Benchmark Comparison: The ETF's performance should be compared to the AlphaDEXu00ae Germany Index to gauge its effectiveness in tracking the target index.

Expense Ratio: 0.58

Average Trading Volume

The ETF's average trading volume is moderate, which can affect the ease of buying and selling shares.

Bid-Ask Spread

The bid-ask spread should be monitored to assess the cost of trading, and a narrow spread indicates higher liquidity.

Market Environment Factors

Economic conditions in Germany and globally, sector-specific trends, and investor sentiment towards German equities affect FGM's performance.

Growth Trajectory

Growth depends on the performance of the German stock market and the effectiveness of the AlphaDEXu00ae methodology. Changes to strategy and holdings are periodically disclosed by First Trust.

Competitive Edge

FGM's competitive advantage lies in its use of the AlphaDEXu00ae methodology, which seeks to identify and overweight stocks with superior growth and value characteristics. This quantitative approach differentiates it from traditional market-cap-weighted ETFs. Its value proposition is to deliver enhanced returns compared to passive investment strategies. FGM's niche market focus provides potentially higher returns, although this may come with more volatility.

Volatility

The fund's volatility is affected by the volatility of the German stock market and the specific stocks selected by the AlphaDEXu00ae methodology.

Market Risk

Market risk includes economic downturns, political instability, and regulatory changes in Germany, which can impact the value of the ETF's holdings.

Ideal Investor Profile

The fund is suitable for investors seeking exposure to the German equity market with a focus on growth and value stocks.

Market Risk

The fund is best for long-term investors who are willing to accept higher volatility in pursuit of potentially higher returns.

First Trust Germany AlphaDEXu00ae Fund (FGM) offers targeted exposure to German equities using a quantitative, rules-based selection process. Its AlphaDEXu00ae methodology aims to outperform market-cap-weighted indexes by focusing on stocks with strong growth and value characteristics. While it presents potential for enhanced returns, investors should be prepared for moderate volatility. The fund is best suited for long-term investors seeking to diversify their portfolios with German stocks, potentially at a higher return than the market average.

Data Sources:

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

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Investors should consult with a financial advisor before making any investment decisions. Past performance is not indicative of future results.