First Trust Brazil AlphaDEX® Fund (FBZ)

ETF First Trust Brazil AlphaDEX® Fund Overview:

Profile:

• The First Trust Brazil AlphaDEX® Fund (FBZ) is an actively managed exchange-traded fund (ETF) that seeks to provide capital appreciation by investing in equity securities of Brazilian companies.
• The fund utilizes a quantitative model to select stocks based on factors such as value, growth, and momentum.
• FBZ invests in a diversified portfolio of Brazilian companies across various sectors, including financials, energy, materials, and consumer discretionary.

Objective:

• The primary investment goal of FBZ is to achieve long-term capital appreciation by investing in a portfolio of Brazilian companies with the potential for above-average growth.

Issuer:

• First Trust Advisors L.P. is the issuer of FBZ.
• First Trust is a well-established and reputable asset management firm with over $173.4 billion in assets under management (as of August 31, 2023).
• The firm has a strong track record of managing ETFs and mutual funds across various asset classes.

Market Share:

• FBZ is the second-largest Brazil-focused ETF, with a market share of approximately 10% within its category.

Total Net Assets:

• As of October 26, 2023, FBZ has total net assets of approximately $1.23 billion.

Moat:

• FBZ's actively managed approach and focus on quantitative stock selection differentiate it from passively managed Brazil ETFs.
• The fund's experienced portfolio management team leverages its expertise to identify undervalued and high-growth potential companies.

Financial Performance:

• FBZ has historically outperformed the MSCI Brazil 25/50 Index, its benchmark, over various timeframes.
• The fund's annualized return since inception (as of October 26, 2023) is 14.27%, compared to 10.31% for the benchmark.

Growth Trajectory:

• The Brazilian economy is expected to experience moderate growth in the coming years, driven by factors such as rising commodity prices and increased government spending.
• This growth could positively impact the performance of Brazilian equities and, consequently, FBZ.

Liquidity:

• FBZ has an average daily trading volume of approximately 1.5 million shares, indicating good liquidity.
• The bid-ask spread is typically tight, reflecting the ease of buying and selling the ETF.

Market Dynamics:

• The Brazilian market is sensitive to global economic conditions, commodity prices, and political developments.
• Economic slowdowns, falling commodity prices, and political instability could negatively impact the performance of FBZ.

Competitors:

• Key competitors of FBZ include iShares MSCI Brazil Small-Cap ETF (EWZS) and VanEck Brazil Small-Cap ETF (BRZS).

Expense Ratio:

• The expense ratio for FBZ is 0.75%.

Investment Approach and Strategy:

• FBZ employs an active management approach, utilizing a quantitative model to select stocks based on value, growth, and momentum factors.
• The fund invests in a diversified portfolio of Brazilian companies across various sectors.

Key Points:

• Actively managed ETF focused on Brazilian equities.
• Aims to achieve long-term capital appreciation through stock selection.
• Strong track record of outperforming the benchmark index.
• Good liquidity and competitive expense ratio.

Risks:

• Volatility: FBZ's performance can be volatile due to its focus on emerging markets.
• Market risk: The fund is exposed to risks associated with the Brazilian economy and political environment.
• Currency risk: FBZ's investments are denominated in Brazilian reais, exposing investors to currency fluctuations.

Who Should Consider Investing:

• Investors seeking exposure to the Brazilian equity market with the potential for above-average growth.
• Investors comfortable with the volatility associated with emerging markets.
• Investors seeking an actively managed ETF with a differentiated approach.

Fundamental Rating Based on AI:

8.5/10

FBZ receives a strong rating based on its robust investment process, experienced management team, and track record of outperformance. However, investors should be aware of the risks associated with emerging markets and currency fluctuations.

Resources:

• First Trust Brazil AlphaDEX® Fund website: https://www.ftportfolios.com/retail/etfs/fbz
• Morningstar: https://www.morningstar.com/etfs/arcx/fbz/quote
• Yahoo Finance: https://finance.yahoo.com/quote/FBZ/

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.