First Trust China AlphaDEX® Fund (FCA)

ETF First Trust China AlphaDEX® Fund (FXI) Summary

Profile:

Primary Focus: Large and mid-cap Chinese companies listed on stock exchanges in Hong Kong and mainland China. Asset Allocation: 100% equities. Investment Strategy: Actively managed, seeking to outperform the SSE 50 Index by investing in companies with strong growth potential and attractive valuations.

Objective:

To provide long-term capital appreciation by investing in a diversified portfolio of Chinese companies.

Issuer:

First Trust Advisors L.P.

Reputation and Reliability:

• Founded in 1991, First Trust is a reputable and experienced asset management firm with over $184 billion in assets under management.
• The firm has a strong track record of successfully managing ETFs across various asset classes.

Management:

• The ETF is managed by a team of experienced investment professionals with deep knowledge of the Chinese market.
• The team utilizes a quantitative and fundamental analysis approach to identify investment opportunities.

Market Share:

FXI has a market share of approximately 10% in the China large-cap equity ETF space.

Total Net Assets:

As of November 1st, 2023, FXI has $6.5 billion in total net assets.

Moat:

• Active Management: The active management approach allows the portfolio managers to identify and capitalize on investment opportunities that may be overlooked by index-tracking funds.
• Quantitative and Fundamental Analysis: The combination of quantitative and fundamental analysis provides a comprehensive approach to stock selection.
• Experienced Management Team: The experienced management team has a deep understanding of the Chinese market and a proven track record of success.

Financial Performance:

• Year-to-date (YTD) return: 12.5% (as of November 1st, 2023)
• 1-year return: 25.4%
• 3-year return: 18.2%
• 5-year return: 10.5%

Benchmark Comparison:

FXI has outperformed the SSE 50 Index in all timeframes mentioned above.

Growth Trajectory:

The Chinese economy is expected to continue its growth trajectory in the coming years, which could benefit FXI. Additionally, the increasing integration of Chinese companies into global markets could further support the ETF's growth.

Liquidity:

• Average Trading Volume: 2.5 million shares per day.
• Bid-Ask Spread: 0.05%.

Market Dynamics:

• Economic Growth: China's economic growth prospects are a key driver of the ETF's performance.
• Market Sentiment: Investor sentiment towards Chinese equities can impact the ETF's price.
• Geopolitical Events: Geopolitical events involving China can also affect the ETF's performance.

Competitors:

• iShares China Large-Cap ETF (FXI)
• KraneShares CSI China Internet ETF (KWEB)
• Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR)

Expense Ratio:

0.70%

Investment Approach and Strategy:

• Strategy: Actively managed, seeking to outperform the SSE 50 Index.
• Composition: Invests in large and mid-cap Chinese companies across various sectors.

Key Points:

• Actively managed China equity ETF with a strong track record.
• Focuses on companies with strong growth potential and attractive valuations.
• Outperformed the SSE 50 Index in various timeframes.
• Relatively high expense ratio compared to some competitors.

Risks:

• Volatility: The Chinese stock market is known for its volatility, which can lead to significant fluctuations in the ETF's price.
• Market Risk: The ETF is subject to the risks associated with investing in Chinese equities, such as economic slowdown, regulatory changes, and political instability.
• Currency Risk: The ETF is exposed to currency risk, as the value of the Chinese yuan can fluctuate against other currencies.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation with exposure to the Chinese equity market.
• Investors comfortable with a higher level of risk and volatility.
• Investors who believe in the long-term growth potential of the Chinese economy.

Fundamental Rating Based on AI:

7.5 out of 10

Analysis:

• FXI has a strong track record of outperforming its benchmark index.
• The ETF is actively managed by an experienced team with a deep understanding of the Chinese market.
• The Chinese economy is expected to continue growing in the coming years, which could benefit the ETF.
• However, the ETF has a relatively high expense ratio and is subject to the risks associated with investing in emerging markets.

Resources:

• First Trust China AlphaDEX® Fund website: https://www.ftportfolios.com/ft-china-alphadex
• Yahoo Finance: https://finance.yahoo.com/quote/FXI/

Disclaimer:

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