First Trust United Kingdom AlphaDEX® Fund (FKU)

Overview

The First Trust United Kingdom AlphaDEXu00ae Fund (FKU) seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called the StrataQuantu00ae United Kingdom Index. The index is designed to select potential equity investments from the NASDAQ UK Benchmark Index using the AlphaDEXu00ae selection methodology, which seeks to identify stocks with attractive value and momentum.

Reputation and Reliability

First Trust is a well-known and established ETF provider with a solid reputation in the financial industry.

Management Expertise

First Trust has a dedicated team of investment professionals with experience in managing various ETF products.

Goal

The fund's goal is to provide investment results that generally correspond to the price and yield of the StrataQuantu00ae United Kingdom Index.

Investment Approach and Strategy

Strategy: The fund uses an indexing strategy, attempting to replicate the performance of the StrataQuantu00ae United Kingdom Index, which employs the AlphaDEXu00ae methodology to select stocks.

Composition The ETF holds a portfolio of UK equities selected based on growth factors, such as price appreciation and sales growth, and value factors, such as price-to-book ratio, cash flow-to-price ratio, and return on assets.

Market Share: FKU's market share within the UK equity ETF category is relatively small.

Total Net Assets (AUM): 54551822

Key Competitors

• iShares MSCI United Kingdom ETF (EWU)
• Franklin FTSE United Kingdom ETF (FLUK)
• WisdomTree United Kingdom Hedged Equity Fund (DXPS)

Competitive Landscape

The competitive landscape is dominated by iShares MSCI United Kingdom ETF (EWU). FKU's AlphaDEXu00ae methodology offers a differentiated approach compared to broad market-cap weighted ETFs. A disadvantage is the lower AUM and potential higher expenses that come with smaller funds.

Historical Performance: Historical performance data should be consulted to assess the ETF's track record; data not available in this format.

Benchmark Comparison: The ETF's performance should be compared to the StrataQuantu00ae United Kingdom Index to evaluate its effectiveness; data not available in this format.

Expense Ratio: 0.8

Average Trading Volume

The average trading volume for FKU can vary, but its liquidity is generally considered moderate.

Bid-Ask Spread

The bid-ask spread for FKU is typically wider than more liquid, popular ETFs like EWU.

Market Environment Factors

Economic conditions in the UK, sector growth prospects within the UK market, and global market sentiment can affect FKU's performance.

Growth Trajectory

The growth trajectory is dependent on the performance of the underlying UK equities selected by the AlphaDEXu00ae methodology and overall investor interest in UK equities.

Competitive Edge

FKUu2019s competitive advantage lies in its use of the AlphaDEXu00ae methodology, which seeks to identify undervalued stocks with strong growth potential. This differentiated approach may appeal to investors seeking alpha generation rather than simply tracking a market-cap weighted index. However, the success of this approach is contingent on the effectiveness of the AlphaDEXu00ae stock selection process and its ability to outperform the broader market. The fund may attract investors looking for a quantitatively driven investment strategy focused on the UK market.

Volatility

Volatility will depend on the volatility of the underlying UK equities.

Market Risk

Market risk includes fluctuations in the UK stock market, currency risk (for non-UK investors), and sector-specific risks related to the industries represented in the ETF.

Ideal Investor Profile

The ideal investor is one who seeks exposure to the UK equity market but desires a smart beta strategy over broad market exposure.

Market Risk

The fund is best suited for long-term investors who are comfortable with a potentially higher expense ratio in exchange for the potential for alpha generation via the smart beta strategy.

The First Trust United Kingdom AlphaDEXu00ae Fund offers a unique smart beta approach to investing in UK equities. By employing the AlphaDEXu00ae methodology, the fund seeks to identify undervalued stocks with strong growth potential. While the fund offers the potential for alpha generation, investors should be aware of its smaller AUM and potentially higher expense ratio compared to its larger competitors. It's suitable for investors who desire a smart beta strategy, are comfortable with moderate volatility, and have a long-term investment horizon. However, it only has about 1% of the market share of EWU.

Data Sources:

• First Trust website
• ETF.com
• Morningstar

Disclaimers:

The data provided is for informational purposes only and should not be considered financial advice. Investment decisions should be made based on individual circumstances and after consulting with a qualified financial advisor. Market share data is an estimate based on available AUM information and might not be completely accurate. Performance data is not available in this format.