First Trust Latin America AlphaDEX® Fund (FLN)

Overview

The First Trust Latin America AlphaDEXu00ae Fund (FTRI) seeks investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the StrataQuantu00ae Latin America Index. It aims to identify and select Latin American equities based on growth and value factors.

Reputation and Reliability

First Trust is a well-established ETF provider with a reputation for innovation and a wide range of investment products.

Management Expertise

First Trust Advisors L.P. has extensive experience in managing ETFs and utilizes a disciplined approach to investment management.

Goal

The fund's investment objective is to seek investment results that correspond generally to the price and yield, before fees and expenses, of the StrataQuantu00ae Latin America Index.

Investment Approach and Strategy

Strategy: The fund employs a 'quantitatively driven' methodology, selecting stocks based on factors such as growth, value, and momentum.

Composition The ETF holds a basket of Latin American equities selected based on the AlphaDEX methodology, rebalanced and reconstituted quarterly.

Market Share: FTRI's market share in the Latin America equity ETF sector is not dominant but represents a meaningful portion.

Total Net Assets (AUM): 37580000

Key Competitors

• iShares Latin America 40 ETF (ILF)
• Franklin FTSE Latin America ETF (FLPA)
• Xtrackers MSCI Latin America Equity ETF (LATM)

Competitive Landscape

The Latin America equity ETF market is competitive, dominated by larger, more established funds like ILF. FTRI differentiates itself through its AlphaDEX methodology, potentially offering different risk-adjusted returns. However, it faces challenges in attracting assets due to lower liquidity and brand recognition compared to its larger peers. Its advantage lies in its unique stock selection, while its disadvantage is lower AUM and higher expenses.

Historical Performance: Historical performance varies depending on the time period and broader market conditions affecting Latin American equities.

Benchmark Comparison: The ETF's performance should be compared to the StrataQuantu00ae Latin America Index to assess tracking effectiveness.

Expense Ratio: 0.8

Average Trading Volume

The average trading volume is moderate, which might impact the ease of buying and selling large quantities.

Bid-Ask Spread

The bid-ask spread can vary but generally is wider compared to more liquid ETFs, potentially increasing transaction costs.

Market Environment Factors

Economic growth in Latin America, political stability, currency fluctuations, and commodity prices significantly influence the fund's performance.

Growth Trajectory

The fund's growth depends on investor appetite for Latin American equities and the effectiveness of its AlphaDEX strategy; changes in holdings reflect quarterly rebalancing.

Competitive Edge

FTRI's competitive advantage lies in its AlphaDEX methodology, which aims to select stocks based on a combination of growth and value factors, potentially leading to outperformance. This quantitative approach differentiates it from traditional market-cap weighted ETFs. However, the fund's smaller size and relatively higher expense ratio pose challenges in attracting and retaining investors. Furthermore, the performance of the AlphaDEX strategy is subject to market conditions and may not always result in superior returns.

Volatility

Latin American equities can be highly volatile, reflecting economic and political uncertainty in the region.

Market Risk

Specific risks include currency risk, political risk, and economic risk associated with investing in Latin American markets.

Ideal Investor Profile

Investors seeking exposure to Latin American equities with a tilt towards growth and value stocks may find this fund suitable.

Market Risk

The ETF is suited for investors with a higher risk tolerance seeking potential outperformance compared to broad market ETFs and is best for long-term investors due to the volatility.

The First Trust Latin America AlphaDEXu00ae Fund offers a unique approach to investing in Latin American equities by employing a quantitative methodology. Its AlphaDEX strategy aims to select stocks based on growth and value factors, differentiating it from market-cap weighted ETFs. However, its smaller AUM, higher expense ratio, and the inherent volatility of Latin American markets present challenges. The fund is suitable for risk-tolerant investors seeking potential outperformance over the long term. Investors should compare the fund's performance against its benchmark and consider its liquidity before investing.

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. Past performance is not indicative of future results. Investors should conduct their own due diligence before making any investment decisions.