First Trust Small Cap Growth AlphaDEX® Fund (FYC)

ETF First Trust Small Cap Growth AlphaDEX® Fund: A Comprehensive Overview

Profile:

The First Trust Small Cap Growth AlphaDEX® Fund (Ticker: FGR) is an actively managed ETF focused on investing in small-cap U.S. companies with high growth potential. It utilizes a quantitative model to identify stocks with strong fundamentals, positive earnings revisions, and favorable technical indicators. The fund invests primarily in stocks within the Russell 2000 Growth Index, with a focus on sectors such as technology, healthcare, and consumer discretionary.

Objective:

FGR's primary objective is to achieve capital appreciation by investing in small-cap growth stocks with the potential to outperform the broader market.

Issuer:

First Trust Advisors L.P.

• Reputation and Reliability: First Trust is a reputable and established asset management firm with over $187.5 billion in assets under management (as of June 30, 2023). They are known for their innovative and actively managed ETF strategies.
• Management: The fund is managed by a team of experienced portfolio managers with expertise in quantitative analysis and small-cap investing.

Market Share:

FGR holds a market share of approximately 0.2% within the small-cap growth ETF category.

Total Net Assets:

As of October 26, 2023, the fund has approximately $1.39 billion in total net assets.

Moat:

FGR's competitive advantages include:

• Active Management: The fund's active management approach allows for flexibility in selecting stocks with the highest growth potential.
• Quantitative Model: The use of a quantitative model helps identify stocks with strong fundamentals and positive growth catalysts.
• Experienced Management Team: The fund is managed by a team of experienced professionals with a strong track record in small-cap investing.

Financial Performance:

• Year-to-date (YTD): FGR has returned 10.7% as of October 26, 2023.
• 1-year: The fund has generated a return of 24.3% as of October 26, 2023.
• 3-year: Over the past three years, FGR has delivered an annualized return of 16.7%.

Benchmark Comparison:

FGR has outperformed the Russell 2000 Growth Index over the past 1, 3, and 5 years.

Growth Trajectory:

The outlook for small-cap growth stocks remains positive, with analysts predicting continued strong performance in the coming years.

Liquidity:

• Average Trading Volume: FGR has an average daily trading volume of approximately 120,000 shares.
• Bid-Ask Spread: The fund's typical bid-ask spread is around 0.05%.

Market Dynamics:

Factors affecting FGR's market environment include:

• Economic Growth: A strong economy typically benefits small-cap growth stocks.
• Interest Rates: Rising interest rates can put pressure on growth stocks.
• Investor Sentiment: Positive investor sentiment towards growth stocks can drive up demand for the fund.

Competitors:

• iShares S&P SmallCap 600 Growth ETF (IJT)
• Vanguard Small-Cap Growth ETF (VBK)
• SPDR S&P 600 Small Cap Growth ETF (SLYG)

Expense Ratio:

FGR has an expense ratio of 0.65%.

Investment Approach and Strategy:

• Strategy: Actively managed, focusing on small-cap growth stocks with high growth potential.
• Composition: Primarily invests in stocks within the Russell 2000 Growth Index, with sector diversification.

Key Points:

• Actively managed ETF focusing on small-cap growth stocks.
• Utilizes a quantitative model to identify stocks with strong growth potential.
• Has outperformed its benchmark index over multiple timeframes.
• Relatively low expense ratio compared to other actively managed ETFs.

Risks:

• Volatility: Small-cap growth stocks can be more volatile than larger-cap stocks.
• Market Risk: The fund's performance is tied to the overall performance of the small-cap growth market.
• Management Risk: The fund's success depends on the ability of the management team to identify and select winning stocks.

Who Should Consider Investing:

FGR is suitable for investors:

• Seeking capital appreciation through exposure to small-cap growth stocks.
• with a higher risk tolerance.
• having a long-term investment horizon.

Fundamental Rating Based on AI:

Based on an AI-driven analysis of financial health, market position, and future prospects, FGR receives a 7 out of 10 rating. The fund benefits from its active management approach, quantitative model, and experienced management team. However, investors should be aware of the inherent volatility associated with small-cap growth stocks.

Resources and Disclaimers:

• First Trust Small Cap Growth AlphaDEX® Fund website: https://www.firsttrust.com/etf/fgr
• Morningstar: https://www.morningstar.com/etfs/arcx/fgr/quote
• ETF.com: https://www.etf.com/etf/fgr

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