First Trust Small Cap Core AlphaDEX® Fund (FYX)

Overview

The First Trust Small Cap Core AlphaDEXu00ae Fund (FYX) is an ETF that seeks investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the NASDAQ AlphaDEXu00ae Small Cap Core Index. The fund selects stocks from the NASDAQ US 700 Small Cap Index using the AlphaDEXu00ae methodology, focusing on growth and value factors.

Reputation and Reliability

First Trust is a well-established ETF provider with a history of innovation and diverse product offerings.

Management Expertise

First Trust Advisors L.P. has a team of experienced professionals managing its ETFs, leveraging quantitative strategies and fundamental research.

Goal

To seek investment results that correspond generally to the price and yield, before fees and expenses, of the NASDAQ AlphaDEXu00ae Small Cap Core Index.

Investment Approach and Strategy

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

Composition The ETF holds a diversified portfolio of small-cap stocks selected from the NASDAQ US 700 Small Cap Index. The fund's portfolio is rebalanced and reconstituted quarterly.

Market Share: FYX holds a relatively small market share compared to broader small-cap ETFs, suggesting a niche focus within the segment.

Total Net Assets (AUM): 217461700

Key Competitors

• IWM
• VB
• SMLV
• VIOV

Competitive Landscape

The small-cap ETF market is highly competitive, with several large players dominating the landscape. FYX differentiates itself with its AlphaDEXu00ae methodology, focusing on a rules-based approach to select and weight stocks based on growth and value factors. A disadvantage may be that these factor-based ETFs can underperform the broader small-cap index in certain market environments.

Historical Performance: Past performance does not guarantee future results. Investors should review the fund's fact sheet for performance data over various time periods.

Benchmark Comparison: The ETF's performance should be compared to the NASDAQ AlphaDEXu00ae Small Cap Core Index to assess its tracking effectiveness.

Expense Ratio: 0.62

Average Trading Volume

The average trading volume of FYX is moderate, which can affect the ease of buying and selling shares, especially for large orders.

Bid-Ask Spread

The bid-ask spread for FYX is generally reasonable, reflecting its trading activity, but can widen during periods of market volatility.

Market Environment Factors

Economic growth, interest rates, and investor sentiment towards small-cap stocks influence FYX's performance.

Growth Trajectory

FYX's growth trajectory depends on its ability to effectively select stocks based on its AlphaDEXu00ae methodology. Any changes to the methodology or holdings may significantly alter the funds performance.

Competitive Edge

FYX's AlphaDEXu00ae methodology offers a systematic approach to stock selection, potentially leading to outperformance compared to traditional market-cap weighted indexes. It targets companies exhibiting strong growth and value characteristics. First Trust's reputation as a reputable ETF issuer provides credibility and investor confidence. A rules-based approach can provide consistency.

Volatility

As a small-cap fund, FYX is expected to exhibit higher volatility compared to large-cap funds due to the inherent risk associated with smaller companies.

Market Risk

The underlying assets are primarily small-cap stocks, which are susceptible to market fluctuations and economic downturns. Performance is tied directly to the performance of the holdings.

Ideal Investor Profile

The ideal investor is one who is looking for a small-cap exposure and is willing to accept the volatility and risks associated with small-cap stocks to potentially earn excess returns. Investors who believe in the factor investing approach may prefer FYX.

Market Risk

FYX is suitable for long-term investors who seek to diversify their portfolio with small-cap stocks and are comfortable with moderate to high risk.

First Trust Small Cap Core AlphaDEXu00ae Fund (FYX) offers exposure to the small-cap equity market through a unique, rules-based stock selection process. Using the AlphaDEXu00ae methodology, FYX focuses on companies with strong growth and value characteristics. While its expense ratio is relatively high, investors seeking a systematic approach to small-cap investing may find FYX attractive. The fund's performance and risk profile should be carefully considered before investing.

Data Sources:

• First Trust website
• ETFdb.com
• Morningstar

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances and consultation with a qualified financial advisor.