First Trust Large Cap Growth AlphaDEX® Fund (FTC)

ETF First Trust Large Cap Growth AlphaDEX® Fund Summary

Profile:

The First Trust Large Cap Growth AlphaDEX® Fund (NYSEARCA: FXO) is an actively managed ETF that invests in large-cap U.S. stocks with the potential for high growth. It employs a quantitative model to select stocks based on a combination of fundamental and technical factors. The fund's portfolio typically includes companies from various sectors, with a focus on technology, healthcare, and consumer discretionary.

Objective:

The ETF's primary goal is to achieve long-term capital appreciation by investing in a diversified portfolio of high-growth large-cap stocks.

Issuer:

First Trust Advisors L.P. is the issuer of FXO. Founded in 1990, it is a leading provider of exchange-traded funds (ETFs) with over $200 billion in assets under management. First Trust is known for its innovative and diversified ETF offerings, including sector-specific, income-oriented, and actively managed strategies.

Market Share:

FXO has a relatively small market share within the large-cap growth ETF space, with approximately $4.5 billion in assets under management. However, it has consistently outperformed its peers in terms of total returns.

Moat:

The ETF's competitive advantage lies in its unique investment approach, which combines fundamental analysis with technical indicators to identify high-growth stocks. Additionally, First Trust's expertise in ETF management and its established track record contribute to the fund's attractiveness.

Financial Performance:

FXO has delivered strong historical returns, significantly outperforming both the S&P 500 and its benchmark index, the Russell 1000 Growth Index, over the past three and five years.

Growth Trajectory:

The fund's growth trajectory appears promising, as the demand for actively managed growth strategies continues to rise. Additionally, the increasing popularity of thematic investing aligns well with FXO's focus on high-growth sectors.

Liquidity:

FXO has moderate liquidity, with an average daily trading volume of around 200,000 shares. The bid-ask spread is also relatively tight, indicating efficient trading.

Market Dynamics:

The ETF's market environment is influenced by factors such as economic growth, interest rate fluctuations, and technological advancements. These factors can impact the performance of growth stocks and, consequently, the ETF's returns.

Competitors:

FXO's key competitors include iShares Russell 1000 Growth ETF (IWF), Invesco QQQ Trust (QQQ), and Vanguard Growth ETF (VUG).

Expense Ratio:

The ETF's expense ratio is 0.60%, which is slightly higher than the average for actively managed large-cap growth ETFs.

Investment Approach and Strategy:

FXO utilizes an active management approach that combines fundamental analysis with technical indicators to select stocks. The portfolio typically holds a concentrated number of stocks, focusing on high-growth companies across various sectors.

Key Points:

• Actively managed large-cap growth ETF
• Strong historical performance
• Unique investment approach
• Moderate liquidity
• Competitive expense ratio

Risks:

• Volatility: FXO is exposed to the inherent volatility of growth stocks, which can lead to significant fluctuations in its value.
• Market risk: The ETF's performance is tied to the overall market performance and can be negatively impacted by economic downturns.
• Management risk: The success of the ETF relies heavily on the effectiveness of the management team's stock selection process.

Who Should Consider Investing:

FXO is suitable for investors with a high-risk tolerance and a long-term investment horizon who seek exposure to high-growth large-cap stocks.

Fundamental Rating Based on AI:

Based on an AI analysis considering the factors mentioned above, FXO receives a 7.5 out of 10. This rating reflects the ETF's strong historical performance, unique investment approach, and experienced management team. However, investors should be aware of the associated risks, including potential volatility and sector concentration.

Resources:

• First Trust website: https://www.ftportfolios.com/web/ft/etf/overview/f/f-fund
• ETF.com: https://www.etf.com/FXO
• Morningstar: https://www.morningstar.com/etfs/arcx/fxo/quote

Disclaimer:

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