First Trust Emerging Markets Small Cap AlphaDEX® Fund (FEMS)

Overview

The First Trust Emerging Markets Small Cap AlphaDEXu00ae Fund (FPX) is an actively managed exchange-traded fund that seeks to deliver capital appreciation by investing in a portfolio of emerging market small-cap stocks selected using the AlphaDEXu00ae methodology. This methodology aims to identify companies with strong fundamental characteristics such as growth and value metrics.

Reputation and Reliability

First Trust is a well-established provider of ETFs with a broad range of investment products, known for its diverse selection of actively managed and index-based ETFs.

Management Expertise

The fund is managed by First Trust Advisors L.P., which has a dedicated team of investment professionals with experience in managing equity portfolios, particularly focusing on quantitative selection methodologies like AlphaDEXu00ae.

Goal

The primary investment goal is to achieve capital appreciation by investing in emerging market small-capitalization companies that exhibit strong performance characteristics.

Investment Approach and Strategy

Strategy: The ETF employs an actively managed strategy that utilizes the proprietary AlphaDEXu00ae selection methodology to screen and select emerging market small-cap equities. It does not aim to track a specific index but rather to identify fundamentally strong companies.

Composition The ETF primarily holds common stocks of small-capitalization companies domiciled in emerging market countries. The specific holdings are dynamic and change based on the AlphaDEXu00ae methodology's evaluation of company fundamentals.

Market Share: Specific market share data for niche emerging market small-cap ETFs like FPX is difficult to pinpoint precisely without dedicated market research reports. However, it competes within the broader emerging markets ETF space.

Total Net Assets (AUM): 141391481

Key Competitors

• iShares MSCI Emerging Markets Small-Cap ETF (EEMS)
• Vanguard FTSE Emerging Markets ETF (VWO)
• iShares Core MSCI Emerging Markets ETF (IEMG)

Competitive Landscape

The emerging markets ETF landscape is highly competitive, dominated by large, diversified ETFs that track broad emerging market indices. FPX operates in a niche segment of emerging market small-caps, which generally have less liquidity and higher volatility than their large-cap counterparts. FPX's advantage lies in its active management and AlphaDEXu00ae methodology, potentially identifying undervalued small-cap opportunities. However, its actively managed nature may lead to higher expense ratios compared to passive index-tracking ETFs, and its specific stock selection might not always outperform broader market indices.

Historical Performance: Detailed historical performance data (e.g., 1-year, 3-year, 5-year returns, YTD) should be obtained from financial data providers. Generally, emerging market small-caps can exhibit higher volatility than large-cap counterparts.

Benchmark Comparison: As an actively managed fund, FPX does not explicitly track a benchmark. Its performance would be compared against relevant emerging market small-cap indices or broad emerging market indices to assess its relative success.

Expense Ratio: 0.0079

Average Trading Volume

The average trading volume for FPX is typically in the tens of thousands of shares daily, indicating moderate liquidity.

Bid-Ask Spread

The bid-ask spread for FPX is generally competitive for an emerging markets small-cap ETF, but may be wider than that of larger, more liquid ETFs.

Market Environment Factors

FPX is influenced by global economic growth, geopolitical stability in emerging markets, currency fluctuations, commodity prices, and investor sentiment towards emerging market equities. Sector-specific growth within emerging markets and the overall trend of small-cap investing also play a role.

Growth Trajectory

The growth trajectory of FPX is tied to the performance of emerging market economies and their small-cap segments. Changes in strategy or holdings are driven by the AlphaDEXu00ae methodology's ongoing evaluation of companies.

Competitive Edge

FPX's competitive edge stems from its AlphaDEXu00ae methodology, which systematically selects emerging market small-cap stocks based on fundamental growth and value factors. This active, systematic approach aims to identify companies with superior potential compared to passive index replication. It targets a less-explored niche within emerging markets, offering potential for diversification and alpha generation.

Volatility

FPX is expected to exhibit higher volatility compared to ETFs focused on developed markets or large-cap emerging market stocks, due to the inherent nature of small-cap and emerging market investments.

Market Risk

Specific market risks include currency risk (as investments are in foreign currencies), political and economic instability in emerging countries, potential for lower liquidity in underlying securities, and greater sensitivity to global economic downturns.

Ideal Investor Profile

The ideal investor for FPX is one with a higher risk tolerance, seeking exposure to the growth potential of emerging market small-cap equities and comfortable with the volatility associated with this asset class. Investors should have a long-term investment horizon.

Market Risk

FPX is best suited for long-term investors looking for opportunistic growth and diversification within emerging markets. It is not typically recommended for short-term traders due to potential volatility and bid-ask spreads.

The First Trust Emerging Markets Small Cap AlphaDEXu00ae Fund (FPX) offers investors exposure to a dynamically selected portfolio of emerging market small-cap stocks, aiming for capital appreciation through its proprietary AlphaDEXu00ae methodology. While it targets a potentially high-growth segment, investors must be aware of the associated volatility and risks inherent in emerging markets and small-cap equities. Its active management and systematic approach distinguish it from broader passive emerging market ETFs.

Data Sources:

• First Trust Investments website
• Financial data aggregators (e.g., Bloomberg, Morningstar - actual data sources would be specified in a real-time scenario)

Disclaimers:

This JSON output is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making investment decisions. Data points like AUM and expense ratios are subject to change and should be verified with the latest fund filings.