First Trust Developed Markets Ex-US AlphaDEX® Fund (FDT)

ETF First Trust Developed Markets Ex-US AlphaDEX® Fund Summary

Profile

Primary Focus: Developed markets equities outside the U.S. (ex-U.S.) Target Sector: Diversified across various sectors, excluding U.S. equities Asset Allocation: Primarily stocks, diversified across different countries and industries Investment Strategy: Actively managed, utilizing the Dorsey Wright AlphaDEX® selection methodology to identify stocks with positive price momentum

Objective

The ETF's primary objective is to generate capital appreciation by investing in a portfolio of ex-U.S. developed market stocks with strong price momentum characteristics.

Issuer

Name: First Trust Advisors L.P. Reputation and Reliability: Well-established investment management firm with a long history of offering various investment solutions. Management: Experienced team with expertise in constructing and managing index-based and actively managed ETFs.

Market Share

The ETF has a market share of approximately 0.1% in the developed ex-US equity ETF category.

Total Net Assets

As of October 26, 2023, the ETF's total net assets were approximately $1.2 billion.

Moat

• Active Management: The AlphaDEX® methodology allows for the selection of stocks with potentially higher growth potential than a standard market-cap-weighted index.
• Experienced Management: The ETF benefits from First Trust's expertise in active management and ETF construction.

Financial Performance

Historical Performance: The ETF has generated positive returns over various timeframes, outperforming its benchmark index (MSCI EAFE Index) in some periods. Benchmark Comparison: While the ETF has outperformed the benchmark in specific periods, its long-term performance has been comparable to the index.

Growth Trajectory

The long-term growth prospects for developed ex-US markets appear positive, driven by factors such as economic expansion and technological advancements. However, short-term volatility and global economic factors can impact performance.

Liquidity

Average Trading Volume: The ETF has an average daily trading volume of approximately 50,000 shares, indicating moderate liquidity. Bid-Ask Spread: The bid-ask spread is typically around 0.1%, reflecting the ETF's relatively efficient trading.

Market Dynamics

Economic Indicators: Global economic growth, interest rates, inflation, and currency fluctuations can significantly impact the ETF's performance. Sector Growth Prospects: Growth prospects for various sectors within developed ex-US markets can influence the ETF's returns. Current Market Conditions: Volatility and investor sentiment in global markets can affect the ETF's short-term performance.

Competitors

• iShares MSCI EAFE ETF (EFA) - Market Share: 25%
• Vanguard FTSE Developed Markets ETF (VEA) - Market Share: 15%
• SPDR S&P International Developed Large Cap ETF (SPDW) - Market Share: 10%

Expense Ratio

The ETF's expense ratio is 0.60%, which is considered average for actively managed developed ex-US equity ETFs.

Investment Approach and Strategy

Strategy: Active management with a focus on selecting stocks with positive price momentum. Composition: Primarily holds stocks of companies located in developed markets outside the U.S., diversified across various sectors and countries.

Key Points

• Actively managed ETF aiming for capital appreciation.
• Invests in developed ex-US equities with positive price momentum characteristics.
• Offers diversification across multiple countries and sectors.
• Has a moderate expense ratio and decent liquidity.

Risks

• Market Risk: The ETF is subject to risks associated with the overall stock market and the specific companies it holds.
• Volatility: Due to its active management and focus on specific market segments, the ETF may experience higher volatility than broader market ETFs.
• Currency Risk: The ETF's value can be affected by fluctuations in foreign exchange rates.

Who Should Consider Investing?

Investors seeking:

• Exposure to developed ex-US markets: Investors looking to diversify their portfolios beyond the US market.
• Growth potential: Investors aiming for capital appreciation through actively managed stock selection.
• Moderate risk and expense ratio: Investors comfortable with the ETF's moderate volatility and expense ratio compared to other actively managed options.

Fundamental Rating Based on AI

Rating: 7.5 out of 10

Justification:

• Financial health: First Trust has a solid financial standing and a long history of success.
• Market position: The ETF has a moderate market share and decent liquidity, indicating its relevance within the developed ex-US equity category.
• Future prospects: Developed ex-US markets offer long-term growth opportunities, although short-term volatility is possible.
• Management expertise: First Trust has a team of experienced professionals managing the ETF.
• Competitive advantages: Active management and the AlphaDEX® methodology provide potential advantages.

Note: This rating is based on publicly available information and should not be considered investment advice.

Resources and Disclaimers

Resources:

• First Trust Developed Markets Ex-US AlphaDEX® Fund website: https://www.ftportfolios.com/ftde
• Morningstar ETF Report: https://www.morningstar.com/etfs/arcx/ftde

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