First Trust Switzerland AlphaDEX® Fund (FSZ)

Overview

The First Trust Switzerland AlphaDEXu00ae Fund (SWISS) seeks to provide capital appreciation by investing in a portfolio of Swiss equities that exhibit strong growth and value characteristics, identified using the AlphaDEXu00ae methodology. The fund targets companies demonstrating superior performance metrics, aiming to outperform traditional market-cap-weighted indexes.

Reputation and Reliability

First Trust is a well-established and reputable provider of exchange-traded funds (ETFs) with a significant track record in offering innovative and actively managed solutions, as well as index-based products. Their reliability is generally considered high.

Management Expertise

The management of First Trust ETFs typically involves experienced teams with deep knowledge of equity markets and quantitative methodologies. The AlphaDEXu00ae methodology itself is a proprietary approach to stock selection, suggesting specialized expertise in identifying and exploiting market inefficiencies.

Goal

The primary investment goal of the First Trust Switzerland AlphaDEXu00ae Fund is to achieve capital appreciation by investing in a diversified portfolio of Swiss equities selected based on their fundamental characteristics.

Investment Approach and Strategy

Strategy: The ETF does not aim to track a specific index but rather employs a quantitative, rules-based selection process using the AlphaDEXu00ae methodology. This methodology ranks stocks based on specific growth and value factors, selecting those with the highest rankings.

Composition The ETF primarily holds common stocks of companies incorporated or primarily traded in Switzerland. The composition is dynamic and changes based on the AlphaDEXu00ae methodology's ongoing evaluation of stock fundamentals.

Market Share: Specific market share data for individual country-specific ETFs like SWISS is often granular and may not be readily available as a distinct percentage. Its market share is within the broader European equity ETF or Switzerland equity ETF segment.

Total Net Assets (AUM): As of recent data, the Total Net Assets (AUM) for the First Trust Switzerland AlphaDEXu00ae Fund are approximately $69.85 million (as of December 31, 2023).

Key Competitors

• iShares MSCI Switzerland ETF (EWL)
• WisdomTree Switzerland Dividend ex-Financials Fund (CH)
• Vaneck Switzerland ETF (VBSR)

Competitive Landscape

The Swiss equity ETF market is dominated by broader Switzerland index-tracking ETFs. The First Trust Switzerland AlphaDEXu00ae Fund operates in a niche with its factor-based approach. Its advantage lies in its systematic, non-benchmark-hugging strategy, potentially identifying undervalued or high-growth opportunities. A disadvantage could be its lower AUM and trading volume compared to larger index ETFs, potentially leading to wider bid-ask spreads.

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Benchmark Comparison: The First Trust Switzerland AlphaDEXu00ae Fund aims to outperform traditional market-cap indexes through its AlphaDEXu00ae methodology. While it may not have a direct, publicly stated benchmark for performance comparison, its returns are evaluated against broad Swiss equity market performance.

Expense Ratio: 0.7

Average Trading Volume

The average daily trading volume for the First Trust Switzerland AlphaDEXu00ae Fund is typically moderate, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for the First Trust Switzerland AlphaDEXu00ae Fund can vary, but it is generally wider than that of larger, more liquid ETFs, reflecting its niche market and lower trading volume.

Market Environment Factors

Factors influencing the First Trust Switzerland AlphaDEXu00ae Fund include the overall health of the Swiss economy, the performance of key sectors like pharmaceuticals, financials, and industrials, geopolitical stability, and global economic trends that impact demand for Swiss exports and services.

Growth Trajectory

The fund's growth trajectory is tied to the performance of its selected Swiss equities and the effectiveness of the AlphaDEXu00ae methodology in identifying profitable companies. Changes in strategy or holdings are driven by the quantitative model's adjustments to stock rankings.

Competitive Edge

The fund's primary competitive advantage lies in its proprietary AlphaDEXu00ae methodology, which systematically identifies Swiss stocks based on both growth and value factors. This quantitative, rules-based approach aims to deliver alpha by exploiting perceived inefficiencies in the market, offering a distinct strategy compared to passive index-tracking ETFs. Its focus on a specific, high-quality market like Switzerland also provides a concentrated exposure.

Volatility

The historical volatility of the First Trust Switzerland AlphaDEXu00ae Fund is generally in line with that of actively managed equity funds focusing on a single country, exhibiting moderate to high fluctuations depending on market conditions.

Market Risk

The specific market risks associated with the ETF's underlying assets include those inherent to the Swiss equity market, such as currency fluctuations (Swiss Franc), sector-specific downturns (e.g., pharmaceuticals, banking), and broader European economic conditions. The AlphaDEXu00ae methodology's focus on growth and value factors also introduces specific factor risks.

Ideal Investor Profile

The ideal investor for the First Trust Switzerland AlphaDEXu00ae Fund is one seeking diversified exposure to Swiss equities with a bias towards companies demonstrating strong fundamental characteristics, and who understands and believes in a quantitative, factor-based investment approach.

Market Risk

This ETF is best suited for long-term investors who are looking for active management within a specific country's equity market and are comfortable with the potential for higher volatility and expense ratios compared to passive ETFs, but seeking potential for alpha generation.

The First Trust Switzerland AlphaDEXu00ae Fund (SWISS) is an actively managed ETF employing a quantitative AlphaDEXu00ae methodology to select Swiss equities with strong growth and value characteristics. While its AUM and market share are modest compared to broader index ETFs, it offers a distinct approach to Swiss equity investing. Investors should consider its higher expense ratio and potential for volatility, but it may appeal to those seeking alpha in a developed European market.

Data Sources:

• First Trust Portfolios website (for ETF details, AUM, expense ratio, historical performance)
• Financial data aggregators (for market share and competitor data)

Disclaimers:

The information provided is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions. Data accuracy may vary based on the source and time of retrieval.