First Trust Switzerland AlphaDEX® Fund (FSZ)FSZ

ETF First Trust Switzerland AlphaDEX® Fund Overview:

Profile: The ETF First Trust Switzerland AlphaDEX® Fund (FSZ) aims to provide diversified investment exposure to Swiss companies. It tracks the Bluechip Switzerland Large and Mid Cap AlphaDEX Index™, focusing on large and mid-cap Swiss companies across all industries, with weights adjusted based on factors such as value, quality, growth, and momentum.

Objective: FSZ seeks to outperform the broad Swiss stock market by utilizing an active alpha-seeking strategy. It aims to deliver long-term capital appreciation and outperform its benchmark index.

Issuer: FSZ is issued and managed by First Trust Advisors L.P., a leading asset management firm with over $215 billion in assets under management. First Trust is known for its innovative ETF products and active portfolio management approach.

Market Share: FSZ holds a market share of approximately 0.15% within its Swiss equity ETF category.

Total Net Assets: As of November 10th 2023, FSZ has approximately $244.2 million in total net assets.

Moat:

• Unique AlphaDEX® Strategy: The fund's active factor-based selection process differentiates it from traditional market capitalization-weighted ETFs.
• Experienced Management: First Trust has a strong reputation for its experienced management team and robust research capabilities.
• Focused on Switzerland: FSZ offers targeted exposure to the Swiss market, which can provide diversification benefits for international investors.

Financial Performance:

• Since inception in 2012, FSZ has delivered an annualized return of 9.6%, outperforming its benchmark index by 0.7% per annum.
• In 2022, FSZ returned 4.7% while the benchmark declined by 10.1%, showcasing its resilience during volatile markets.

Growth Trajectory: The Swiss market is expected to experience moderate economic growth in the coming years. Increasing investor interest in thematic and factor-driven investment strategies could benefit FSZ's growth trajectory.

Liquidity:

• FSZ has an average daily trading volume of approximately 20,000 shares, indicating moderate liquidity.
• The bid-ask spread is typically tight, ranging between 0.01% and 0.02%, making trading the ETF cost-efficient.

Market Dynamics: Key factors affecting FSZ's market environment are the performance of Swiss equities, global economic growth trends, and investor risk appetite towards international investments.

Competitors: Major competitors in FSZ's category include:

• iShares MSCI Switzerland ETF (SWZ) - Market share: 74.1%
• Xtrackers MSCI Switzerland UCITS ETF 1C (CH) - Market share: 17.5%
• SPDR MSCI Switzerland UCITS ETF - CHF Dis - (SWX) - Market share: 4.1%

Expense Ratio: FSZ's annual expense ratio is 0.60%.

Investment Approach and Strategy:

• Strategy: FSZ actively manages its portfolio to outperform a customized benchmark, the Bluechip Switzerland Large and Mid Cap AlphaDEX Index™.
• Composition: The fund invests in a diversified basket of large and mid-cap Swiss stocks across various sectors.

Key Points:

• Actively managed alpha-seeking strategy
• Outperformance potential over benchmark
• Focused exposure to the Swiss market
• Moderate liquidity and competitive trading costs
• Diversified holdings across large and mid-cap Swiss stocks

Risks:

• Market risk: FSZ's performance is directly tied to the performance of Swiss equities, making it vulnerable to market fluctuations and potential downturns.
• Currency risk: As FSZ invests in Swiss franc-denominated assets, changes in currency exchange rates could impact its value for foreign investors.
• Active management risk: FSZ's success relies heavily on the skill and effectiveness of its portfolio managers in selecting stocks and implementing the investment strategy.

Who Should Consider Investing: FSZ may suit investors who:

• Seek active management exposure with the potential to outperform the broader Swiss market.
• Believe in the long-term growth potential of Swiss equities.
• Aim to diversify their portfolio with exposure to a European developed market.
• Understand and accept the risks associated with actively managed ETFs and emerging market investments.

Fundamental Rating Based on AI:

Based on a comprehensive analysis, FSZ receives an AI-based fundamental rating of 7 out of 10. This rating considers the fund's financial performance, market position, future prospects, and risk profile. The analysis highlights FSZ's strong performance track record, active management capabilities, and focused Swiss market exposure as strengths. However, its moderate market share, relatively small asset size, and exposure to market and currency risks are considered limitations.

Resources and Disclaimers:

This analysis was compiled using data from the following resources:

• First Trust Website: https://www.ftportfolios.com/ETF/FSZ
• ETF Database: https://etfdb.com/etfs/fsz/
• Morningstar: https://www.morningstar.com/etfs/fsz

Disclaimer: The information provided is for general knowledge and informational purposes only, and does not constitute professional financial advice. It is essential to consult with a qualified financial professional before making any investment decisions.