First Trust Small Cap Core AlphaDEX® Fund (FYX)

Overview

The First Trust Small Cap Core AlphaDEXu00ae Fund (FSHA) is an actively managed ETF that seeks to provide capital appreciation. It focuses on U.S. small-cap companies that are screened using an AlphaDEXu00ae methodology, aiming to identify stocks with strong potential for outperformance based on various fundamental factors. The fund's asset allocation is primarily in equities, with a diversification across various sectors.

Reputation and Reliability

First Trust is a well-established and reputable ETF issuer with a long history of bringing innovative and actively managed ETFs to market. They are known for their diverse range of strategies and commitment to providing investment solutions.

Management Expertise

The ETF is managed by a team of experienced investment professionals at First Trust Portfolios L.P. Their expertise lies in identifying and implementing quantitative screening strategies, specifically the AlphaDEXu00ae methodology, to select securities.

Goal

The primary investment goal of the First Trust Small Cap Core AlphaDEXu00ae Fund is to achieve long-term capital appreciation by investing in a diversified portfolio of U.S. small-capitalization common stocks.

Investment Approach and Strategy

Strategy: The ETF does not track a specific index. Instead, it employs an actively managed strategy that utilizes the proprietary AlphaDEXu00ae selection methodology to identify and invest in U.S. small-cap stocks.

Composition The ETF primarily holds common stocks of U.S. small-capitalization companies. The selection is based on a quantitative approach that evaluates various fundamental indicators to identify stocks with strong growth and value characteristics.

Market Share: Specific, up-to-date market share data for individual ETFs can fluctuate and is proprietary to data providers. However, the small-cap ETF space is competitive, with many players.

Total Net Assets (AUM): 1530000000

Key Competitors

• iShares Russell 2000 ETF (IWM)
• Vanguard Small-Cap ETF (VB)
• Schwab U.S. Small-Cap ETF (SCHA)

Competitive Landscape

The small-cap ETF market is highly competitive, dominated by large, passively managed index funds that offer broad market exposure at very low costs. First Trust Small Cap Core AlphaDEXu00ae Fund differentiates itself through its active management and proprietary AlphaDEXu00ae methodology, which aims to outperform passive benchmarks. Its advantage lies in its potential to identify undervalued or high-growth small-cap stocks. However, its disadvantage compared to passive ETFs is its higher expense ratio and the risk that its active strategy may not consistently outperform the market.

Historical Performance: [object Object],[object Object],[object Object],[object Object]

Benchmark Comparison: The ETF generally aims to outperform a small-cap growth or blend index. Its performance relative to benchmarks can vary depending on market conditions and the effectiveness of its AlphaDEXu00ae methodology in selecting outperforming stocks.

Expense Ratio: 0.65

Average Trading Volume

The ETF exhibits moderate average daily trading volume, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for this ETF is typically within an acceptable range, reflecting its moderate trading volume and liquidity.

Market Environment Factors

The performance of FSHA is influenced by broader economic indicators such as interest rates, inflation, and GDP growth, which impact the overall small-cap segment. Sector-specific trends, technological advancements, and regulatory changes within the industries it invests in also play a significant role. Current market sentiment towards growth versus value stocks can also affect its performance.

Growth Trajectory

FSHA's growth trajectory is tied to its ability to consistently identify and invest in small-cap companies exhibiting strong growth potential and value. Changes in strategy or holdings would be driven by adjustments to the AlphaDEXu00ae methodology based on evolving market data and performance analysis, aiming to maintain its competitive edge in the small-cap space.

Competitive Edge

The primary competitive advantage of FSHA lies in its proprietary AlphaDEXu00ae methodology, which employs a quantitative screening process to identify companies with strong fundamentals and potential for outperformance. This active management approach allows it to deviate from broad market indexes and target specific characteristics that may lead to superior returns. The focus on small-cap companies, a segment often associated with higher growth potential, also contributes to its unique positioning.

Volatility

The ETF has historically exhibited moderate to high volatility, characteristic of small-cap equities, which are generally more susceptible to market fluctuations than large-cap stocks.

Market Risk

Market risk for FSHA includes general economic downturns, interest rate changes, and geopolitical events that can negatively impact the overall stock market. Additionally, as it focuses on small-cap companies, it faces risks related to their higher sensitivity to economic cycles, limited financial resources, and greater susceptibility to competitive pressures.

Ideal Investor Profile

The ideal investor for the First Trust Small Cap Core AlphaDEXu00ae Fund is an individual seeking long-term capital appreciation and who understands and is comfortable with the higher risk and volatility associated with small-cap stocks. Investors should have a moderate to aggressive risk tolerance and a long-term investment horizon.

Market Risk

This ETF is best suited for long-term investors who believe in the potential of small-cap companies and are looking for an actively managed approach to capture potential alpha. It is less suitable for short-term traders or investors with a very low risk tolerance.

The First Trust Small Cap Core AlphaDEXu00ae Fund (FSHA) is an actively managed ETF focused on U.S. small-cap stocks, utilizing a proprietary AlphaDEXu00ae methodology for security selection. Its goal is long-term capital appreciation, and it aims to outperform passive benchmarks through its quantitative approach. While it offers potential for higher growth, investors should be aware of the inherent volatility and higher expense ratio associated with small-cap equities and active management. It is best suited for long-term investors with a moderate to aggressive risk tolerance.

Data Sources:

• First Trust Investments
• Financial data aggregators (e.g., Morningstar, ETF.com - simulated for this exercise)

Disclaimers:

This JSON output is based on publicly available information and simulated data for illustrative purposes. It is not financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Market share and performance data are subject to change.