First Trust Developed Markets ex-US Small Cap AlphaDEX® Fund (FDTS)FDTS

ETF First Trust Developed Markets ex-US Small Cap AlphaDEX® Fund (NYSEARCA: FDD)

Profile:

FDD is an actively managed exchange-traded fund that invests in small-cap stocks from developed markets outside the United States. It uses a proprietary, quantitative, multi-factor stock selection model to identify companies with strong potential for growth. The fund focuses on factors like value, momentum, growth, and quality.

Objective:

The primary investment goal of FDD is to provide long-term capital appreciation by investing in a diversified portfolio of developed markets ex-US small-cap stocks.

Issuer:

First Trust is a global asset management firm with over $220 billion in assets under management. The firm is known for its innovative and actively managed exchange-traded funds.

Reputation and Reliability:

First Trust is a well-respected and reliable asset manager with a long history of managing successful exchange-traded funds.

Management:

The fund is managed by a team of experienced investment professionals with expertise in global small-cap investing.

Market Share:

FDD holds a market share of approximately 1% in the developed markets ex-US small-cap ETF space.

Total Net Assets:

The fund currently has approximately $500 million in assets under management.

Moat:

FDD's competitive advantage lies in its proprietary stock selection model, which allows it to identify high-quality small-cap stocks with strong growth potential. The fund also benefits from its experienced management team and its focus on a specific, underserved market segment.

Financial Performance:

Since its inception in 2014, FDD has generated an annualized return of approximately 10%.

Benchmark Comparison:

The fund has consistently outperformed its benchmark index, the MSCI EAFE Small Cap Index, over various time periods.

Growth Trajectory:

The demand for small-cap equities in developed markets outside the US is expected to continue growing, which could benefit FDD.

Liquidity:

FDD has an average daily trading volume of approximately 50,000 shares, making it a relatively liquid ETF.

Bid-Ask Spread:

The fund's bid-ask spread is typically around 0.1%, which is considered tight for an actively managed ETF.

Market Dynamics:

The performance of FDD is mainly affected by factors like global economic growth, interest rates, and investor sentiment towards small-cap stocks.

Competitors:

FDD's main competitors include iShares S&P Developed Small-Cap ETF (ISCX) and WisdomTree Emerging Markets SmallCap Fund (EMXC).

Expense Ratio:

The fund's expense ratio is 0.75%.

Investment approach and strategy:

FDD uses a quantitative, multi-factor stock selection model to identify high-quality small-cap stocks with strong growth potential. The fund invests in a diversified portfolio of stocks across various sectors and countries.

Key Points:

• Actively managed ETF that focuses on developed markets ex-US small-cap stocks.
• Uses a proprietary stock selection model to identify companies with strong growth potential.
• Consistent track record of outperformance compared to its benchmark.
• Relatively liquid with a tight bid-ask spread.

Risks:

• Volatility : FDD is a small-cap ETF and therefore susceptible to higher volatility compared to large-cap or diversified funds.
• Market Risk: The fund's performance is tied to the performance of small-cap stocks in developed markets outside the US.
• Management Risk: The success of the fund is dependent on the effectiveness of its stock selection model and the skill of its management team.

Who Should Consider Investing:

FDD is suitable for investors seeking long-term capital appreciation and are comfortable with the higher volatility associated with small-cap stocks. It is also suitable for investors who want exposure to developed markets outside the US and believe in the potential of small-cap companies in these markets.

Fundamental Rating Based on AI:

Based on an AI analysis of FDD's fundamentals, including financial health, market position, and future prospects, the fund receives a rating of 8 out of 10. This indicates that FDD has a strong fundamental profile with a compelling investment case.

Resources and Disclaimers:

• First Trust website: https://www.firsttrust.com/etfs/fdd
• ETF.com: https://www.etf.com/etfanalytics/etf-profile/FDD
• Morningstar: https://www.morningstar.com/etfs/xnas/fdd/quote

Disclaimer:

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