First Trust Consumer Staples AlphaDEX® Fund (FXG)

Overview

The First Trust Consumer Staples AlphaDEXu00ae Fund (FXG) is an ETF that seeks investment results that correspond generally to the price and yield of the StrataQuantu00ae Consumer Staples Index. The fund uses an enhanced indexing methodology to select and weight consumer staples stocks, potentially outperforming the traditional market-cap weighted approach.

Reputation and Reliability

First Trust is a well-established ETF provider with a reputation for innovative and strategically designed funds.

Management Expertise

First Trust has a dedicated team of investment professionals with extensive experience in managing and analyzing various asset classes, including sector-specific ETFs.

Goal

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

Investment Approach and Strategy

Strategy: FXG aims to outperform the consumer staples sector by selecting stocks based on growth factors like sales growth, price appreciation, and value factors like price to book value, cash flow to price and return on assets. It does not replicate a market-cap weighted index.

Composition The ETF holds stocks of companies in the consumer staples sector, including food and beverage, household products, and tobacco companies.

Market Share: Insufficient data to reliably calculate FXG's exact market share.

Total Net Assets (AUM): 105751265.35

Key Competitors

• Consumer Staples Select Sector SPDR Fund (XLP)
• Vanguard Consumer Staples ETF (VDC)
• iShares U.S. Consumer Staples ETF (IYK)

Competitive Landscape

The consumer staples ETF market is dominated by XLP and VDC, which are significantly larger and offer broad market-cap weighted exposure. FXG differentiates itself with its AlphaDEXu00ae methodology, potentially offering higher returns but also introducing different risks than the market-cap weighted approaches of its larger competitors. FXG's advantage lies in its potential for alpha generation, while its disadvantage is its smaller AUM and potentially higher volatility.

Historical Performance: Historical performance data is readily available from financial websites. Consult sources like Morningstar or ETFdb.com for precise figures.

Benchmark Comparison: FXG's performance should be compared against the StrataQuantu00ae Consumer Staples Index and its major competitors (XLP, VDC) to assess its effectiveness in delivering alpha.

Expense Ratio: 0.63

Average Trading Volume

FXG's average trading volume is moderate, which may affect order execution costs especially for large trades.

Bid-Ask Spread

The bid-ask spread can vary based on market conditions, but it's important to monitor for potential impact on trading costs.

Market Environment Factors

Consumer spending, interest rates, inflation, and regulatory changes can impact FXG. Consumer staples are generally less sensitive to economic cycles than other sectors.

Growth Trajectory

FXG's growth trajectory depends on the success of its AlphaDEXu00ae methodology in identifying and weighting consumer staples stocks with strong growth potential, and continued popularity of its investment strategy.

Competitive Edge

FXG's competitive advantage stems from its AlphaDEXu00ae methodology, which aims to select and weight stocks based on growth and value factors, potentially leading to higher returns than traditional market-cap weighted approaches. This methodology distinguishes it from other consumer staples ETFs like XLP and VDC, which are passively managed and track market capitalization weighted indexes. However, the fund's success depends on the effectiveness of the methodology itself, which can vary over time based on market conditions. This can create both opportunities and challenges for the fund in comparison to its competitors.

Volatility

FXG may exhibit higher volatility than broader consumer staples ETFs due to its active selection process and smaller AUM.

Market Risk

The fund is exposed to market risk within the consumer staples sector. Specific risks include changes in consumer preferences, regulatory actions, and competition within the sector.

Ideal Investor Profile

Investors seeking potential outperformance within the consumer staples sector and willing to accept potentially higher volatility compared to traditional market-cap weighted ETFs.

Market Risk

FXG is suitable for investors seeking a targeted investment in the consumer staples sector with a potentially enhanced return profile. Best suited for those that understand that active management might come with increased risks.

The First Trust Consumer Staples AlphaDEXu00ae Fund (FXG) aims to outperform the consumer staples sector through its unique AlphaDEXu00ae methodology. It selects and weights stocks based on growth and value factors, potentially generating higher returns. However, this active approach can also lead to higher volatility compared to traditional market-cap weighted ETFs. Investors should carefully consider their risk tolerance and investment objectives before investing in FXG. It represents a targeted investment for those seeking potentially enhanced returns within the consumer staples sector.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar
• YCharts

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Investment decisions should be made based on your own research and risk tolerance.