First Trust Consumer Discretionary AlphaDEX® Fund (FXD)

Overview

The First Trust Consumer Discretionary AlphaDEXu00ae Fund (FXD) seeks investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the StrataQuantu00ae Consumer Discretionary Index. The fund invests in a broad range of consumer discretionary companies, utilizing the AlphaDEXu00ae methodology to select and weight securities based on growth factors.

Reputation and Reliability

First Trust is a well-established and reputable ETF issuer with a long track record of providing innovative investment solutions.

Management Expertise

First Trust has experienced professionals managing the ETF with proficiency in quantitative investment strategies.

Goal

To provide investment results that correspond generally to the price and yield of the StrataQuantu00ae Consumer Discretionary Index.

Investment Approach and Strategy

Strategy: The ETF employs an 'enhanced' index approach, selecting and weighting stocks based on factors like sales growth, price appreciation, and book value.

Composition The fund primarily invests in a diversified portfolio of stocks of consumer discretionary companies.

Market Share: The fund holds a portion of the consumer discretionary ETF market, but its share is smaller than some of its larger competitors.

Total Net Assets (AUM): 1587000000

Key Competitors

• XLY
• VCR
• RCD

Competitive Landscape

The consumer discretionary ETF industry is highly competitive, dominated by larger, passively managed funds. FXD's AlphaDEXu00ae methodology provides a differentiated approach, potentially offering higher returns but also carrying more risk. Larger competitors offer lower expense ratios and greater liquidity.

Historical Performance: Historical performance varies, but it has generally delivered competitive returns relative to its benchmark over longer time horizons.

Benchmark Comparison: The fund aims to outperform its benchmark, the StrataQuantu00ae Consumer Discretionary Index. Relative performance will vary.

Expense Ratio: 0.63

Average Trading Volume

The average daily trading volume is moderate, indicating reasonable liquidity.

Bid-Ask Spread

The bid-ask spread is typically small, representing a relatively low cost of trading.

Market Environment Factors

Consumer spending trends, economic growth, interest rates, and consumer confidence significantly impact FXD's performance.

Growth Trajectory

The growth trajectory is dependent on overall consumer discretionary spending and the effectiveness of the AlphaDEXu00ae strategy. Holdings are periodically rebalanced and re-weighted.

Competitive Edge

FXD's competitive advantage lies in its AlphaDEXu00ae methodology, which uses fundamental growth factors to select and weight securities. This differentiates it from passively managed consumer discretionary ETFs. It seeks to identify companies with strong growth potential. This active strategy can potentially deliver higher returns compared to market-cap weighted ETFs.

Volatility

The fund can exhibit higher volatility than broader market ETFs due to its focus on consumer discretionary stocks.

Market Risk

The consumer discretionary sector is sensitive to economic cycles, which creates market risk. Underperformance of the AlphaDEXu00ae stock selection model creates additional risks.

Ideal Investor Profile

Investors seeking exposure to the consumer discretionary sector with the potential for enhanced returns through an active strategy may find FXD suitable.

Market Risk

FXD may be suitable for long-term investors comfortable with moderate to high risk, looking for potential outperformance in the consumer discretionary sector.

First Trust Consumer Discretionary AlphaDEXu00ae Fund (FXD) offers exposure to the consumer discretionary sector using a unique AlphaDEXu00ae methodology. This active approach seeks to outperform traditional market-cap weighted indexes. The fund is more suitable for investors with moderate to high risk tolerance. FXD's performance is tied to the consumer discretionary sector and the success of its stock selection process. It is a smaller player with moderate liquidity.

Data Sources:

• First Trust website
• ETF.com
• Morningstar

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Investors should consult with a financial professional before making any investment decisions.