First Trust Large Cap Growth AlphaDEX® Fund (FTC)

Overview

The First Trust Large Cap Growth AlphaDEXu00ae Fund (FTC) is an actively managed Exchange Traded Fund (ETF) that seeks to outperform a broad-based large-cap growth index. It invests in companies that exhibit strong growth potential, focusing on factors like revenue and earnings growth, price appreciation, and return on equity. The fund aims to identify these companies through a proprietary quantitative selection methodology.

Reputation and Reliability

First Trust is a well-established and reputable issuer of ETFs with a long history in the asset management industry. They are known for their diverse range of actively and passively managed ETFs, providing a reliable platform for investors.

Management Expertise

First Trust ETFs are managed by experienced teams with expertise in quantitative analysis and portfolio construction. While specific manager details may vary, the firm has a track record of developing and managing complex investment strategies.

Goal

The primary investment goal of the First Trust Large Cap Growth AlphaDEXu00ae Fund is to achieve capital appreciation by investing in a diversified portfolio of large-capitalization U.S. equity securities that exhibit characteristics of growth.

Investment Approach and Strategy

Strategy: This ETF does not track a specific index. Instead, it employs a proprietary quantitative strategy called AlphaDEXu00ae, which is designed to identify and select securities that are expected to outperform.

Composition The ETF primarily holds large-capitalization U.S. stocks, with a focus on companies exhibiting strong growth characteristics in terms of revenue, earnings, and stock price momentum.

Market Share: Specific market share data for individual ETFs can fluctuate and is best obtained from real-time financial data providers. However, FTC operates within the large-cap growth ETF segment, a highly competitive and significant area of the market.

Total Net Assets (AUM):

Key Competitors

• Vanguard Growth ETF (VUG)
• iShares Russell 1000 Growth ETF (IWF)
• Schwab U.S. Large-Cap Growth ETF (SCHG)

Competitive Landscape

The large-cap growth ETF market is highly competitive, dominated by passive index-tracking ETFs that often have lower expense ratios. FTC's key advantage lies in its active management and proprietary AlphaDEXu00ae methodology, aiming to outperform traditional benchmarks. However, its expense ratio is typically higher than passive alternatives, and its performance is dependent on the effectiveness of its quantitative selection model, which may not always outperform.

Historical Performance: Historical performance data for FTC can be found on financial data websites. It's crucial to review multi-year returns, including year-to-date, 1-year, 3-year, 5-year, and 10-year figures, to assess its track record.

Benchmark Comparison: FTC is typically compared against benchmarks like the Russell 1000 Growth Index or the S&P 500 Growth Index. Its performance relative to these benchmarks indicates its effectiveness in achieving its growth objective.

Expense Ratio: 0.69

Average Trading Volume

The average trading volume for FTC indicates its daily trading activity and ease of buying or selling shares.

Bid-Ask Spread

The bid-ask spread represents the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept, reflecting the cost of immediate trading.

Market Environment Factors

FTC is influenced by broader economic indicators such as GDP growth, interest rates, inflation, and investor sentiment. Sector-specific trends within technology, consumer discretionary, and healthcare, which often dominate large-cap growth portfolios, also play a significant role.

Growth Trajectory

The ETF's growth trajectory is tied to the performance of the growth equity market and its ability to consistently identify undervalued growth companies. Changes in its proprietary methodology or shifts in market leadership can impact its holdings and overall performance.

Competitive Edge

FTC's primary competitive edge stems from its proprietary AlphaDEXu00ae methodology, an active quantitative approach designed to identify growth stocks with superior fundamental characteristics. This systematic process aims to avoid biases inherent in traditional fundamental analysis and seeks to capitalize on market inefficiencies by selecting stocks based on factors like value, momentum, and quality.

Volatility

FTC's historical volatility is a measure of its price fluctuations over time. As a growth-oriented equity ETF, it is expected to exhibit higher volatility compared to value or balanced funds, particularly during market downturns.

Market Risk

The primary market risk for FTC is the inherent volatility of the equity markets, especially within the growth segment. Economic recessions, interest rate hikes, and shifts in investor preferences away from growth stocks can negatively impact its performance. Sector-specific risks, such as regulatory changes or technological disruption, also pose threats to its holdings.

Ideal Investor Profile

The ideal investor for FTC is one seeking capital appreciation from large-cap U.S. growth companies, who is comfortable with higher volatility, and who believes in the efficacy of a quantitative, actively managed approach. Investors should have a long-term investment horizon.

Market Risk

FTC is best suited for long-term investors who are looking for exposure to growth stocks and are willing to accept higher levels of risk for potentially higher returns. It is less suitable for short-term traders or highly risk-averse investors.

The First Trust Large Cap Growth AlphaDEXu00ae Fund (FTC) is an actively managed ETF targeting large-cap U.S. growth stocks using a proprietary quantitative methodology. While it aims for outperformance beyond traditional benchmarks, it operates in a competitive landscape with higher expense ratios than passive alternatives. Investors should be aware of its inherent growth stock volatility and its suitability for long-term growth-oriented portfolios.

Data Sources:

• First Trust website
• Financial data aggregators (e.g., Yahoo Finance, Morningstar, ETF.com)

Disclaimers:

This information is for educational purposes only and does not constitute financial advice. ETF performance can fluctuate, and past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making investment decisions.