First Trust Small Cap Value AlphaDEX® Fund (FYT)

Overview

The First Trust Small Cap Value AlphaDEXu00ae Fund (FYX) seeks investment results that correspond generally to the price and yield of an equity index called the StrataQuantu00ae Small Cap Value Index. The fund focuses on small-cap U.S. companies with value characteristics.

Reputation and Reliability

First Trust is a well-established ETF issuer with a strong track record in creating and managing innovative investment products.

Management Expertise

First Trust Advisors L.P. has a seasoned management team with expertise in quantitative investing and ETF portfolio management.

Goal

To provide investment results that correspond generally to the price and yield of the StrataQuantu00ae Small Cap Value Index.

Investment Approach and Strategy

Strategy: The fund uses the AlphaDEXu00ae methodology, a quantitative approach to select and weight stocks based on growth and value factors.

Composition The ETF holds a diversified portfolio of small-cap U.S. stocks identified as value stocks based on various fundamental factors.

Market Share: Data unavailable.

Total Net Assets (AUM): 68700000

Key Competitors

• VBR
• IJS
• AVUV

Competitive Landscape

The small-cap value ETF industry is highly competitive. FYX distinguishes itself through its AlphaDEXu00ae methodology, potentially offering different returns than passively managed funds. However, this active approach can lead to higher expenses. Competitors like VBR offer lower expense ratios and broader diversification, while AVUV aims to provide exposure to small-cap value stocks with a focus on profitability.

Historical Performance: Historical performance data is readily available from various financial data providers.

Benchmark Comparison: Investors should compare FYX's performance to the StrataQuantu00ae Small Cap Value Index and relevant small-cap value benchmarks like the Russell 2000 Value Index.

Expense Ratio: 0.7

Average Trading Volume

The average daily trading volume of FYX can fluctuate, but generally, liquidity is moderate.

Bid-Ask Spread

The bid-ask spread for FYX is usually reasonable, reflecting the underlying liquidity of its holdings.

Market Environment Factors

Small-cap value stocks are influenced by economic growth, interest rates, and investor sentiment towards smaller companies. Value stocks may outperform during periods of economic recovery.

Growth Trajectory

FYX's growth trajectory depends on the performance of its underlying small-cap value holdings and the continued effectiveness of the AlphaDEXu00ae methodology. Changes in the methodology or holdings could impact performance.

Competitive Edge

FYX's competitive advantage lies in its AlphaDEXu00ae methodology, which aims to identify and overweight undervalued small-cap stocks with growth potential. This quantitative approach distinguishes it from passively managed index funds. The strategy seeks to outperform traditional value indices by dynamically re-ranking and rebalancing its holdings. However, the effectiveness of the AlphaDEXu00ae strategy is subject to market conditions and model performance.

Volatility

Small-cap stocks are generally more volatile than large-cap stocks, and value stocks can be sensitive to economic cycles. FYX's volatility may be higher than broader market indices.

Market Risk

FYX is subject to market risk, including the risk of declines in the value of its underlying holdings due to economic downturns, industry-specific factors, or company-specific events.

Ideal Investor Profile

The ideal investor for FYX is someone seeking exposure to small-cap value stocks with the potential for enhanced returns through a quantitative stock selection process and is tolerant of higher volatility.

Market Risk

FYX may be suitable for long-term investors seeking diversification and potential outperformance in the small-cap value space, but it's less suitable for risk-averse investors or those seeking passive index tracking.

The First Trust Small Cap Value AlphaDEXu00ae Fund (FYX) provides exposure to small-cap U.S. value stocks using a proprietary AlphaDEXu00ae methodology. This approach aims to outperform traditional value indices by identifying undervalued stocks with growth potential. However, the fund's active management and small-cap focus result in higher expense ratios and increased volatility. Investors should carefully consider their risk tolerance and investment goals before investing in FYX. Its success depends on the effectiveness of the AlphaDEXu00ae strategy in identifying and weighting securities.

Data Sources:

• First Trust Website
• SEC Filings
• Morningstar
• Bloomberg

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions. Past performance is not indicative of future results.