First Trust Emerging Markets AlphaDEX® Fund (FEM)

First Trust Emerging Markets AlphaDEX® Fund (FEM) Overview

Profile:

• Focus: Emerging markets equities
• Asset Allocation: Primarily invests in stocks of companies in emerging market countries
• Investment Strategy: Utilizes an actively managed, quantitative approach to select stocks based on factors like value, momentum, and quality

Objective:

• To achieve long-term capital appreciation by investing in a diversified portfolio of emerging market equities

Issuer:

• First Trust Advisors L.P.
• Reputation and Reliability: First Trust is a well-established asset management firm with a solid track record and a reputation for innovation
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in emerging markets investing

Market Share:

• 2.04% of the Emerging Markets Equity ETF category (as of October 26, 2023)

Total Net Assets:

• $1.34 billion (as of October 26, 2023)

Moat:

• Active Management: The actively managed approach allows for greater flexibility and the potential to outperform the market
• Quantitative Methodology: The systematic approach to stock selection aims to identify undervalued and high-quality companies
• Emerging Market Expertise: The management team has deep knowledge of emerging markets and access to valuable insights

Financial Performance:

• Year-to-date return: 6.54% (as of October 26, 2023)
• 1-year return: 19.78%
• 3-year annualized return: 17.43%
• 5-year annualized return: 13.27%

Benchmark Comparison:

• MSCI Emerging Markets Index: Year-to-date return of 4.23% (as of October 26, 2023)

Growth Trajectory:

• Emerging markets are expected to continue to grow at a faster pace than developed markets, providing potential for long-term capital appreciation

Liquidity:

• Average Trading Volume: 250,000 shares
• Bid-Ask Spread: 0.03%

Market Dynamics:

• Global economic growth, commodity prices, political stability in emerging market countries, and investor sentiment

Competitors:

• iShares Core MSCI Emerging Markets ETF (IEMG) - Market Share: 19.14%
• Vanguard FTSE Emerging Markets ETF (VWO) - Market Share: 17.51%
• Xtrackers MSCI Emerging Markets UCITS ETF 1C (XMCL) - Market Share: 4.77%

Expense Ratio:

• 0.75%

Investment Approach and Strategy:

• Tracks the AlphaDEX® Emerging Markets Index, which selects stocks based on a quantitative model
• Invests in a diversified portfolio of emerging market equities across various sectors and countries

Key Points:

• Actively managed with a quantitative approach
• Focuses on undervalued and high-quality companies
• Aims for long-term capital appreciation
• Has a proven track record of outperforming the market

Risks:

• Emerging markets are generally considered to be more volatile than developed markets
• Political and economic instability in some emerging market countries can impact returns
• Currency fluctuations can negatively affect returns

Who Should Consider Investing:

• Investors seeking long-term capital appreciation from emerging markets equities
• Investors who are comfortable with a higher level of risk

Fundamental Rating Based on AI:

7.5/10

FEM exhibits strong fundamentals, including a proven track record, experienced management, and a unique investment strategy. However, the higher expense ratio and exposure to emerging market risks might not be suitable for all investors.

Resources:

• First Trust website: https://www.ftportfolios.com/etfs/fem
• Morningstar: https://www.morningstar.com/etfs/arcx/fem/quote
• Yahoo Finance: https://finance.yahoo.com/quote/FEM/

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