First Trust Health Care AlphaDEX® Fund (FXH)

Overview

First Trust Health Care AlphaDEXu00ae Fund (FXH) is an ETF that uses the AlphaDEXu00ae methodology to select and weight healthcare stocks, aiming for outperformance by focusing on growth factors. It seeks to identify companies with potential for superior risk-adjusted returns within the healthcare sector.

Reputation and Reliability

First Trust is a well-established ETF provider known for its innovative indexing strategies and a broad range of sector-specific ETFs.

Management Expertise

First Trust has a dedicated team with experience in managing and developing investment strategies, including the AlphaDEXu00ae methodology.

Goal

The investment objective of the First Trust Health Care AlphaDEXu00ae Fund is to seek investment results that correspond generally to the price and yield of an equity index called the StrataQuantu00ae Health Care Index.

Investment Approach and Strategy

Strategy: The fund employs a tiered AlphaDEXu00ae selection process to identify and weight stocks within the healthcare sector based on growth scores.

Composition The ETF primarily holds stocks of companies in the healthcare sector, including pharmaceuticals, biotechnology, healthcare equipment, and healthcare services.

Market Share: FXH holds a modest market share within the broader healthcare ETF market.

Total Net Assets (AUM): 1388000000

Key Competitors

• XLV
• VHT
• IHI

Competitive Landscape

The healthcare ETF market is dominated by large, passively managed funds like XLV and VHT. FXH differentiates itself with its AlphaDEXu00ae methodology, which aims for active outperformance, but this comes with potentially higher volatility. FXH may be attractive to investors seeking a potentially higher-return, actively-managed approach within the healthcare sector, while XLV and VHT provide broad, lower-cost exposure.

Historical Performance: Past performance does not guarantee future results. Refer to the fund's official website or financial data providers for updated performance data.

Benchmark Comparison: Investors should compare FXH's performance against a broad healthcare index (e.g., S&P 500 Health Care Sector Index) to assess its effectiveness.

Expense Ratio: 0.62

Average Trading Volume

FXH exhibits moderate liquidity, with an average daily trading volume reflecting its niche focus within the healthcare sector.

Bid-Ask Spread

FXH's bid-ask spread is generally competitive, but it can widen during periods of market volatility.

Market Environment Factors

Healthcare sector performance is influenced by factors such as regulatory changes, drug approvals, demographic shifts, and technological advancements. FXH's performance is tied to the overall health of the healthcare sector and the effectiveness of its AlphaDEXu00ae strategy.

Growth Trajectory

FXH's growth trajectory depends on its ability to consistently outperform its benchmark through stock selection, as well as continued investor interest in its methodology.

Competitive Edge

FXH's primary competitive advantage is its AlphaDEXu00ae methodology, which seeks to identify and weight healthcare stocks based on growth factors. This active approach differentiates it from passively managed, market-cap-weighted healthcare ETFs. The fund aims to outperform through a disciplined, rules-based stock selection process. This strategy may appeal to investors seeking potentially higher returns but willing to accept potentially higher volatility.

Volatility

FXH may exhibit higher volatility compared to broad market healthcare ETFs due to its active strategy and concentrated holdings.

Market Risk

The ETF is subject to market risk inherent in the healthcare sector, including regulatory risks, patent expirations, and competition.

Ideal Investor Profile

FXH is suitable for investors seeking targeted exposure to the healthcare sector with the potential for outperformance through active management.

Market Risk

FXH may be suitable for investors with a moderate to high risk tolerance and a longer-term investment horizon, who seek sector-specific alpha.

First Trust Health Care AlphaDEXu00ae Fund (FXH) is a healthcare ETF that employs the AlphaDEXu00ae methodology to select and weight stocks, aiming for superior risk-adjusted returns. Its active management approach differentiates it from passively-managed healthcare ETFs like XLV and VHT. The fund is suitable for investors seeking targeted healthcare sector exposure with a potential for alpha generation, but they should be aware of the higher volatility associated with active strategies. Investors should carefully consider their risk tolerance and investment goals before investing in FXH.

Data Sources:

• First Trust Website
• ETF.com
• Morningstar
• SEC Filings

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Consult with a qualified financial advisor before making any investment decisions. Market share data is approximate and may vary depending on the source and calculation method.