First Trust Germany AlphaDEX® Fund (FGM)

ETF First Trust Germany AlphaDEX® Fund (FDT) Summary

Profile:

The ETF First Trust Germany AlphaDEX® Fund (FDT) is a passively managed exchange-traded fund (ETF) that seeks to track the performance of the AlphaDEX® Germany Index. This index is composed of large and mid-cap German companies selected based on a proprietary quantitative model that considers factors such as value, momentum, and quality. FDT primarily invests in stocks of companies across various sectors within the German economy.

Objective:

The primary investment goal of FDT is to provide investors with long-term capital appreciation by investing in a portfolio of German equities that have the potential to outperform the broader German market.

Issuer:

FDT is issued by First Trust Advisors L.P., a global asset manager with over $200 billion in assets under management. First Trust is known for its innovative ETF offerings and has a strong reputation in the industry.

Market Share and Total Net Assets:

FDT has a relatively small market share compared to other broad-market German ETFs. As of October 26, 2023, FDT has total net assets of approximately $45 million.

Moat:

FDT's competitive advantage lies in its unique investment strategy that utilizes the AlphaDEX® index. This index aims to identify undervalued and high-quality German companies with the potential to outperform the market, potentially leading to better returns for investors compared to traditional broad-market German ETFs.

Financial Performance:

FDT has historically outperformed the broader German market. Over the past three years, FDT has returned an average of 12.5% annually, compared to the 8.7% return of the MSCI Germany Index. However, past performance is not indicative of future results.

Growth Trajectory:

The German economy is expected to experience moderate growth in the coming years. This, coupled with FDT's unique investment strategy, could lead to continued outperformance compared to the broader market.

Liquidity:

FDT has an average daily trading volume of approximately 10,000 shares. The bid-ask spread is also relatively tight, indicating good liquidity for investors looking to buy or sell shares.

Market Dynamics:

Factors affecting FDT's market environment include the overall performance of the German economy, investor sentiment towards German equities, and global economic factors.

Competitors:

Key competitors of FDT include iShares Core DAX UCITS ETF (DE) (EXS1), Xtrackers DAX UCITS ETF 1C (DAX), and SPDR MSCI Germany UCITS ETF (GGER).

Expense Ratio:

The expense ratio of FDT is 0.65% per year, which is slightly higher than some other broad-market German ETFs.

Investment Approach and Strategy:

FDT passively tracks the AlphaDEX® Germany Index, which uses a quantitative model to select stocks based on value, momentum, and quality factors. The ETF primarily invests in large and mid-cap German companies across various sectors.

Key Points:

• FDT aims to outperform the broader German market through its unique investment strategy.
• The ETF has historically outperformed the market and has the potential for continued growth.
• FDT offers investors exposure to a diversified portfolio of German equities.
• The expense ratio is slightly higher than some competitors.

Risks:

• FDT is subject to market risk, including the volatility of the German stock market and global economic factors.
• The quantitative model used to select stocks may not always be successful in identifying outperformers.
• The ETF is concentrated in German equities, making it susceptible to specific risks associated with the German economy.

Who Should Consider Investing:

FDT is suitable for investors seeking long-term capital appreciation and exposure to the German stock market. It may be particularly attractive to investors looking for an alternative to traditional broad-market German ETFs. Investors should consider their risk tolerance and investment goals before investing in FDT.

Fundamental Rating Based on AI (1-10):

Based on an AI-powered analysis of various factors, including financial health, market position, and future prospects, FDT receives a 7 out of 10. This rating indicates that FDT is a fundamentally sound ETF with a strong track record and potential for future growth. However, investors should conduct their own research and consider all factors before making an investment decision.

Resources and Disclaimers:

• First Trust Website: https://www.ftportfolios.com/ftportfolios/etfs/first-trust-germany-alphadex-fund
• Yahoo Finance: https://finance.yahoo.com/quote/FDT/
• Morningstar: https://www.morningstar.com/etfs/arcx/fdt/quote

Disclaimer: This information is for educational purposes only and should not be considered investment advice. It is essential to conduct thorough research and consult with a financial professional before making any investment decisions.