First Trust Energy AlphaDEX® Fund (FXN)

ETF First Trust Energy AlphaDEX® Fund (FENY)

Profile:

FENY is an actively managed exchange-traded fund (ETF) that invests in a diversified portfolio of energy-related companies. The fund utilizes a quantitative model to select securities based on their alpha potential and focuses on both large and mid-cap companies within the energy sector. FENY's portfolio comprises stocks from various sub-industries within energy, including oil & gas exploration & production, integrated oil & gas, oil & gas equipment & services, and independent oil & gas.

Objective:

FENY aims to provide investors with long-term capital appreciation and high current income by investing in a portfolio of energy-related companies with strong alpha potential and attractive dividend yields.

Issuer:

First Trust Advisors L.P. is the issuer of FENY. The company is a recognized provider of exchange-traded funds, with over 170 ETFs under its management. First Trust has a solid reputation in the market, with a long history of offering innovative and well-managed investment products.

Market Share:

As of September 30, 2023, FENY has a market share of approximately 0.8% within the energy sector ETF category.

Total Net Assets:

FENY has approximately $837 million in total net assets as of September 30, 2023.

Moat:

FENY's competitive advantages include:

• Active Management: The fund is actively managed by experienced portfolio managers who utilize a proprietary quantitative model to identify stocks with strong alpha potential.
• Niche Focus: FENY focuses on the energy sector, providing investors with targeted exposure to this industry.
• Attractive Dividends: The fund offers a high dividend yield compared to other energy sector ETFs.

Financial Performance:

FENY has outperformed the S&P 500 Energy Index and its benchmark, the Solactive US Large/Mid Cap Energy Sector Index, over the past 3 and 5 years.

Growth Trajectory:

The energy sector is expected to experience moderate growth in the coming years, driven by increasing global energy demand and rising oil and gas prices.

Liquidity:

FENY has an average daily trading volume of over 200,000 shares, indicating good liquidity. The bid-ask spread is typically tight, around 0.05%.

Market Dynamics:

Factors affecting the market environment for FENY include oil and gas prices, global economic growth, and geopolitical events.

Competitors:

Key competitors of FENY include:

• Energy Select Sector SPDR Fund (XLE): Market share of 44.8%
• Vanguard Energy Index Fund ETF (VDE): Market share of 19.9%
• iShares US Energy ETF (IYE): Market share of 14.1%

Expense Ratio:

The expense ratio for FENY is 0.58%.

Investment Approach and Strategy:

FENY employs an active management approach to identify stocks with high alpha potential within the energy sector. The fund invests in a diversified portfolio of companies across various energy sub-industries, aiming to generate high current income through dividends.

Key Points:

• Actively managed energy sector ETF
• Focuses on alpha potential and dividend yield
• Solid track record of outperformance
• Good liquidity
• High expense ratio compared to some competitors

Risks:

• Volatility: The energy sector is known for its volatility, which could impact FENY's performance.
• Market Risk: The fund is subject to risks associated with the energy sector, such as changes in oil and gas prices and geopolitical events.

Who Should Consider Investing:

FENY may be suitable for investors seeking:

• Exposure to the energy sector
• Active management with a focus on alpha potential
• High dividend income
• Tolerance for volatility

Fundamental Rating Based on AI:

Based on an AI analysis of financial health, market position, and future prospects, FENY receives a Fundamental Rating of 7.5 out of 10. The rating is driven by the fund's strong track record, active management approach, and attractive dividend yield. However, the high expense ratio and exposure to a volatile sector pose some risks.

Resources and Disclaimers:

• First Trust Energy AlphaDEX® Fund (FENY)
• Morningstar FENY Report
• MarketWatch FENY Profile

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