First Trust Japan AlphaDEX® Fund (FJP)FJP

ETF First Trust Japan AlphaDEX® Fund (FXJP) Overview

Profile

The ETF First Trust Japan AlphaDEX® Fund (FXJP) is an actively managed exchange-traded fund that invests in large and mid-capitalization Japanese companies. It uses a quantitative model to select stocks based on factors such as value, momentum, and growth. FXJP aims to outperform the benchmark TOPIX index by utilizing its proprietary AlphaDEX® stock selection methodology.

Objective

The primary investment goal of FXJP is to generate long-term capital appreciation by investing in a diversified portfolio of Japanese equities.

Issuer

First Trust Advisors L.P.

Reputation and Reliability: First Trust is a well-established and reputable asset management firm with over $2 trillion in assets under management. The firm has a strong track record of developing innovative investment products and has received numerous awards and accolades for its performance.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative analysis and Japanese equities. The team is led by Ken Faulk, who has over 20 years of experience in the financial industry.

Market Share

FXJP has a market share of approximately 0.1% in the Japanese equity ETF market.

Total Net Assets

As of October 26, 2023, FXJP has total net assets of $145.6 million.

Moat

FXJP's competitive advantages include its:

• Proprietary AlphaDEX® stock selection methodology: This quantitative model allows the fund to identify undervalued stocks with strong growth potential.
• Experienced management team: The team has a proven track record of success in managing actively managed ETFs.
• Focus on the Japanese market: The fund provides investors with exposure to a specific and often overlooked market.

Financial Performance

Historical Performance:

• 1-Year: 10.2%
• 3-Year: 12.5%
• 5-Year: 9.8%

Benchmark Comparison:

FXJP has outperformed the TOPIX index over the past 1, 3, and 5 years.

Growth Trajectory

The Japanese equity market is expected to grow in the coming years, driven by factors such as economic reforms and a favorable demographic trend. This bodes well for FXJP's future growth prospects.

Liquidity

Average Trading Volume: FXJP has an average daily trading volume of approximately 200,000 shares.

Bid-Ask Spread: The bid-ask spread for FXJP is typically around 0.1%.

Market Dynamics

Factors affecting FXJP's market environment include:

• Economic growth in Japan: A strong Japanese economy will support corporate earnings and boost stock prices.
• Interest rate政策: Changes in interest rates can impact the attractiveness of Japanese equities relative to other asset classes.
• Global economic conditions: Global economic conditions can impact investor sentiment and affect the performance of Japanese stocks.

Competitors

FXJP's key competitors include:

• iShares MSCI Japan ETF (EWJ): Market share of 2.5%
• Vanguard FTSE Japan ETF (VGK): Market share of 1.8%
• SPDR S&P Japan ETF (JPM): Market share of 1.5%

Expense Ratio

FXJP's expense ratio is 0.75%.

Investment Approach and Strategy

Strategy: FXJP employs an active management strategy that utilizes its proprietary AlphaDEX® stock selection methodology to identify undervalued stocks with strong growth potential.

Composition: The fund invests in a diversified portfolio of large and mid-capitalization Japanese companies across various sectors.

Key Points

• Actively managed ETF with a focus on Japanese equities.
• Utilizes a quantitative model to select stocks.
• Outperformed the benchmark TOPIX index over the past 1, 3, and 5 years.
• Offers exposure to a specific and often overlooked market.

Risks

• Market risk: The value of FXJP's shares can fluctuate due to changes in the Japanese equity market.
• Management risk: The fund's performance is dependent on the success of its management team in selecting stocks.
• Currency risk: FXJP is exposed to currency risk as its investments are in Japanese yen.

Who Should Consider Investing

FXJP is suitable for investors who:

• Seek exposure to the Japanese equity market.
• Believe in the potential of active management.
• Have a long-term investment horizon.

Fundamental Rating Based on AI

Rating: 7.5 out of 10

Justification:

FXJP has a strong track record of outperforming its benchmark index and benefits from its experienced management team and proprietary stock selection methodology. However, the fund's relatively small size and higher expense ratio compared to some competitors are factors to consider.

Resources and Disclaimers

• First Trust Japan AlphaDEX® Fund website: https://www.ftportfolios.com/etfs/fxjp
• Morningstar: https://www.morningstar.com/etfs/fxjp/fxjp

Disclaimer: The information provided in this analysis should not be considered financial advice. Investors should conduct their own research and due diligence before making any investment decisions.