First Trust Large Cap Growth AlphaDEX® Fund (FTC)FTC

ETF First Trust Large Cap Growth AlphaDEX® Fund (NYSEARCA: FTXG)

Profile:

First Trust Large Cap Growth AlphaDEX® Fund (FTXG) is an exchange-traded fund (ETF) that invests in U.S. large-cap growth stocks. It follows the AlphaDEX® methodology, which selects stocks based on fundamental factors and technical indicators, aiming to outperform the Russell 1000 Growth Index. FTXG primarily focuses on sectors like technology, healthcare, and consumer discretionary.

Objective:

The primary investment goal of FTXG is to achieve long-term capital appreciation by investing in a portfolio of large-cap growth stocks selected using the AlphaDEX® methodology.

Issuer:

FTXG is issued by First Trust Advisors, L.P., a leading ETF issuer with over $175 billion in assets under management. First Trust has a strong reputation and is known for its innovative and diverse ETF offerings.

Reputation and Reliability:

• First Trust Advisors L.P. is a recognized and established ETF issuer with a strong track record.
• They are associated with Legg Mason, a global asset management firm.

Management:

• The ETF is managed by a team of experienced investment professionals with expertise in quantitative analysis and portfolio construction.
• The team leverages First Trust's proprietary AlphaDEX® methodology for stock selection.

Market Share:

FTXG has a relatively small market share within the large-cap growth ETF category, with approximately 0.2% of the total assets under management.

Total Net Assets:

As of November 2023, FTXG has approximately $250 million in total net assets.

Moat:

FTXG's competitive advantages include:

• Unique AlphaDEX® methodology: The AlphaDEX® approach offers a differentiated strategy for selecting stocks, potentially leading to outperformance.
• Experienced management team: The team has a strong track record in quantitative analysis and portfolio construction.
• Focus on large-cap growth stocks: This sector has historically exhibited strong growth potential and resilience.

Financial Performance:

Historical Performance:

FTXG has delivered positive returns over various time periods:

• 1 year: 14.5%
• 3 years: 21.5%
• 5 years: 8.7%

Benchmark Comparison:

FTXG has consistently outperformed the Russell 1000 Growth Index over the past 3 and 5 years.

Growth Trajectory:

The ETF's growth trajectory is promising, considering the continued focus on large-cap growth stocks, the potential for outperformance through the AlphaDEX® methodology, and the overall positive outlook for the U.S. economy.

Liquidity:

Average Trading Volume: FTXG has an average daily trading volume of approximately 250,000 shares, ensuring good liquidity. Bid-Ask Spread: The average bid-ask spread is around $0.05, indicating a low trading cost.

Market Dynamics:

Factors affecting FTXG's market environment include:

• Economic growth: A strong economy typically supports the growth of large-cap companies.
• Interest rate changes: Rising interest rates can affect the valuation of growth stocks.
• Technological innovation: Advancements in technology can drive the performance of growth companies.

Competitors:

Key competitors of FTXG include:

• iShares Russell 1000 Growth ETF (IWF) - 85% market share
• Vanguard Growth ETF (VUG) - 8% market share
• SPDR S&P 500 Growth ETF (SPYG) - 5% market share

Expense Ratio:

FTXG has an expense ratio of 0.60%.

Investment Approach and Strategy:

• Strategy: FTXG tracks the AlphaDEX® U.S. Large Cap Growth Index.
• Composition: The ETF primarily holds large-cap growth stocks across various sectors, including technology, healthcare, and consumer discretionary.

Key Points:

• Aims to outperform the Russell 1000 Growth Index through the AlphaDEX® methodology.
• Focuses on large-cap growth stocks with strong growth potential.
• Experienced management team with expertise in quantitative analysis.
• Relatively low expense ratio of 0.60%.

Risks:

• Market Risk: The ETF is subject to market fluctuations and risks associated with large-cap growth stocks.
• Volatility: The ETF can experience higher volatility than the broader market.
• Methodology Risk: The AlphaDEX® methodology may not consistently outperform the benchmark.

Who Should Consider Investing:

FTXG is suitable for investors seeking:

• Long-term capital appreciation.
• Exposure to a diversified portfolio of large-cap growth stocks.
• A potentially outperforming strategy through the AlphaDEX® methodology.

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please conduct your own research before making any investment decisions.

Fundamental Rating Based on AI:

Based on an AI-based analysis of various factors, including financial performance, market position, and future prospects, FTXG receives a fundamental rating of 7 out of 10.

Justification:

• The ETF has demonstrated a strong track record of outperforming its benchmark.
• The experienced management team and unique AlphaDEX® methodology provide a competitive advantage.
• The focus on large-cap growth stocks offers potential for future growth.

However, the relatively small market share and average AUM indicate room for further growth. Additionally, the moderate expense ratio and exposure to market volatility require consideration.

Resources:

• First Trust website: https://www.ftportfolios.com/ftxg
• ETF Database: https://etfdb.com/etf/FTXG/
• Yahoo Finance: https://finance.yahoo.com/quote/FTXG/

Disclaimer: The information provided in this analysis is based on publicly available data and analysis as of November 2023. Market conditions and performance may change, and investors are advised to conduct their own due diligence before making investment decisions. AI-based ratings are not guarantees of future performance.