First Trust Technology AlphaDEX® Fund (FXL)

Overview of ETF First Trust Technology AlphaDEX® Fund (FXD)

Profile:

FXD is an exchange-traded fund (ETF) that invests in U.S.-listed technology stocks. It seeks to track the AlphaDEX® Technology Index, which selects its constituents based on fundamental factors such as value, growth, and quality. The ETF has approximately $1.11 billion in assets under management (AUM).

Objectives:

The primary objective of FXD is to provide investors with long-term capital appreciation by investing in a diversified portfolio of technology companies.

Issuer:

First Trust Portfolios LP is the issuer of FXD. First Trust is a global asset management firm with over $200 billion in AUM. The firm has a strong reputation and a long track record of managing ETFs.

Market Share:

FXD is the 8th largest technology ETF by AUM, with a market share of approximately 2.5%.

Moat:

The AlphaDEX® methodology used by FXD can be considered a competitive advantage. This methodology selects companies based on quantitative factors, which can potentially lead to outperformance compared to traditional market-cap weighted indices.

Financial Performance:

• Year-to-date: 8.05%
• 1 year: 20.81%
• 3 years: 10.73%
• 5 years: 12.05%

FXD has outperformed the S&P 500 Index over the past 1, 3, and 5 years.

Growth Trajectory:

The technology sector is expected to continue to grow in the coming years, driven by factors such as increasing adoption of cloud computing, artificial intelligence, and 5G. This growth is likely to benefit FXD.

Liquidity:

• Average daily trading volume: 2,095,000 shares
• Bid-ask spread: 0.03%

FXD is a highly liquid ETF, with a tight bid-ask spread.

Market Dynamics:

The technology sector is sensitive to changes in economic conditions and investor sentiment. Additionally, regulatory changes and technological disruptions can impact the performance of the sector.

Competitors:

• iShares Expanded Tech Sector ETF (IGV)
• Vanguard Information Technology ETF (VGT)
• SPDR S&P Technology Select Sector ETF (XLK)

Expense Ratio:

0.65%

Investment Approach and Strategy:

FXD passively tracks the AlphaDEX® Technology Index, which holds a diversified portfolio of technology companies. The ETF invests in a wide range of sub-sectors within the technology industry, including software, semiconductors, and hardware.

Key Points:

• Invests in a diversified portfolio of technology companies.
• Tracks the AlphaDEX® Technology Index, which uses a quantitative methodology to select stocks.
• Has outperformed the S&P 500 Index over the past 1, 3, and 5 years.
• Highly liquid with a tight bid-ask spread.

Risks:

• The technology sector is volatile and can experience significant fluctuations in value.
• The ETF is subject to market risk, which means that its value can decline if the overall market declines.
• The AlphaDEX® methodology may not outperform other stock selection methods.

Who Should Consider Investing:

FXD is suitable for investors who are looking for long-term capital appreciation and are comfortable with the volatility of the technology sector.

Fundamental Rating Based on AI:

8.5

FXD receives a strong rating based on its financial performance, market share, and investment strategy. The ETF has a proven track record of outperforming the market and is well-positioned to benefit from the growth of the technology sector. However, investors should be aware of the risks associated with the technology sector and the ETF's passive management style.

Resources and Disclaimers:

• First Trust Technology AlphaDEX® Fund website: https://www.firsttrust.com/etfs/fxd
• FactSet
• This information is for educational purposes only and should not be considered investment advice. Please consult with a financial advisor before making any investment decisions.