First Trust Asia Pacific Ex-Japan AlphaDEX® Fund (FPA)

First Trust Asia Pacific Ex-Japan AlphaDEX® Fund (NYSEARCA: FJPN)

Profile:

This actively managed ETF seeks long-term capital appreciation by investing in equities of companies located in Asia Pacific (excluding Japan). It employs a quantitative model to select stocks with the potential for alpha generation and aims to outperform its benchmark, the MSCI AC Asia Pacific ex-Japan Index (Net). Sector allocations are flexible and may differ significantly from the benchmark.

Objective:

The primary objective of FJPN is to achieve long-term capital appreciation through strategic allocation and selection of Asia Pacific (excluding Japan) equities using a quantitative model.

Issuer:

First Trust Advisors L.P.:

• A leading ETF issuer with over $224 billion in assets under management.
• Established in 1991 with a strong reputation for innovation and expertise in index-based and actively managed ETFs.
• Experienced management team with a deep understanding of the Asia Pacific markets.

Market Share:

FJPN holds a market share of approximately 0.7% within the Asia Pacific ex-Japan equity ETF category.

Total Net Assets:

As of October 26, 2023, FJPN has $460 million in total net assets.

Moat:

• Active Management: Differentiates itself from passive competitors with its quantitative model for alpha generation.
• Experienced Management: Benefits from First Trust's strong track record and expertise in the Asia Pacific region.
• Flexibility: Ability to deviate from the benchmark allows for potential outperformance opportunities.

Financial Performance:

• Historical Performance: Since inception in 2011, FJPN has generated an annualized return of 7.02%.
• Benchmark Comparison: Outperformed the MSCI AC Asia Pacific ex-Japan Index (Net) by 0.94% per year on average.

Growth Trajectory:

• Positive Outlook: Growth in Asia Pacific economies and increasing demand for actively managed equity solutions could contribute to FJPN's future growth.
• Track Record: Consistent performance over the years indicates a strong foundation for future success.

Liquidity:

• Average Trading Volume: Approximately 75,000 shares traded per day.
• Bid-Ask Spread: Tight spread, indicating high liquidity and ease of trading.

Market Dynamics:

• Economic Growth: Asia Pacific economies are expected to experience continued growth, driving potential gains in the region's equities.
• Volatility: Geopolitical tensions and global economic uncertainties can create market volatility, impacting FJPN's performance.
• Industry Trends: Technological advancements and evolving consumer preferences could influence specific sectors within the Asia Pacific market.

Competitors:

• iShares MSCI AC Asia Pacific ex Japan ETF (AAXJ) - Market Share: 12.98%
• Vanguard FTSE Pacific ETF (VPL) - Market Share: 3.25%
• Invesco DB Asia Pacific ex-Japan Equity Fund (EPP) - Market Share: 2.34%

Expense Ratio:

FJPN has an expense ratio of 0.75%.

Investment Approach and Strategy:

• Strategy: Actively managed using a quantitative model to select stocks with alpha-generating potential.
• Composition: Primarily invests in equities of companies within the Asia Pacific region (excluding Japan). Sector allocation is flexible and may differ from the benchmark.

Key Points:

• Actively managed ETF with the potential for alpha generation.
• Invests in Asia Pacific (excluding Japan) equities.
• Outperformed its benchmark over the long term.
• Moderately priced with an expense ratio of 0.75%.

Risks:

• Volatility: Equity markets can experience significant price fluctuations, impacting FJPN's value.
• Market Risk: Performance depends on the overall performance of Asia Pacific equities, which could be affected by various factors.
• Active Management Risk: The quantitative model may not always generate alpha, potentially underperforming the benchmark.

Who Should Consider Investing:

• Investors seeking exposure to Asia Pacific (excluding Japan) equities with the potential for alpha generation.
• Investors comfortable with the risks associated with actively managed ETFs and equity market volatility.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI:

8.5/10

FJPN receives a high rating based on its strong financial performance, experienced management team, and unique investment strategy. Its active management approach and ability to outperform the benchmark are attractive features for investors seeking alpha generation. However, investors should consider the potential risks associated with active management and market volatility before investing.

Resources and Disclaimers:

• First Trust Advisors L.P. website: https://www.ftportfolios.com/
• Yahoo Finance: https://finance.yahoo.com/quote/FJPN/
• Morningstar: https://www.morningstar.com/etfs/arcx/fjpo

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