First Trust Small Cap Value AlphaDEX® Fund (FYT)

ETF First Trust Small Cap Value AlphaDEX® Fund (FYT) Overview

Profile

Primary Focus: FYT is an actively managed ETF that invests in small-cap value stocks based on the AlphaDEX® methodology.

Target Sector: Small-cap stocks across various industries.

Investment Strategy: AlphaDEX® seeks to identify stocks with strong potential for capital appreciation by focusing on factors like financial strength, profitability, and growth.

Objective

The primary investment goal of FYT is to generate long-term capital appreciation by investing in small-cap value stocks with the potential to outperform the broader market.

Issuer

First Trust Advisors L.P.

Reputation and Reliability: First Trust is a well-established asset management firm with a strong track record and reputation for innovative ETF products.

Management: The ETF is managed by an experienced team of portfolio managers with expertise in small-cap value investing.

Market Share

FYT has a market share of approximately 0.5% within the small-cap value ETF category.

Total Net Assets

The ETF has approximately $350 million in total net assets.

Moat

Unique Strategy: FYT uses the proprietary AlphaDEX® methodology, which goes beyond traditional value metrics to identify stocks with superior growth potential.

Active Management: The active management approach allows for greater flexibility and the ability to exploit market inefficiencies.

Financial Performance

Historical Performance: FYT has outperformed the Russell 2000 Value Index over the past 3 and 5 years.

Benchmark Comparison: The ETF has consistently outperformed its benchmark index, demonstrating the effectiveness of its active management strategy.

Growth Trajectory

FYT has experienced steady growth in recent years, reflecting increasing investor interest in small-cap value strategies.

Liquidity

Average Trading Volume: FYT has an average daily trading volume of approximately 100,000 shares.

Bid-Ask Spread: The bid-ask spread is typically tight, indicating good liquidity.

Market Dynamics

Factors affecting FYT's market environment include:

• Economic Indicators: Economic growth, interest rates, and inflation can impact small-cap stock performance.
• Sector Growth Prospects: The outlook for the small-cap value sector influences the ETF's performance.
• Market Volatility: Increased market volatility can lead to higher risk and potential losses.

Competitors

Key competitors include:

• iShares S&P Small-Cap 600 Value ETF (IJS)
• Vanguard Small-Cap Value ETF (VBR)
• Schwab Small-Cap Value ETF (SVAL)

Expense Ratio

The expense ratio for FYT is 0.65%.

Investment Approach and Strategy

Strategy: Actively managed, focusing on small-cap value stocks identified through the AlphaDEX® methodology.

Composition: Primarily invests in small-cap stocks across various industries.

Key Points

• Seeks to outperform the Russell 2000 Value Index.
• Actively managed using the proprietary AlphaDEX® methodology.
• Invests in small-cap value stocks with strong growth potential.
• Strong track record of outperformance.

Risks

• Volatility: Small-cap stocks can be more volatile than larger-cap stocks.
• Market Risk: The ETF's performance is tied to the performance of the underlying small-cap value stocks.
• Active Management Risk: The success of the ETF relies on the manager's ability to effectively select stocks.

Who Should Consider Investing

• Investors seeking long-term capital appreciation potential.
• Investors with a higher risk tolerance.
• Investors who believe in the AlphaDEX® methodology.

Fundamental Rating Based on AI

Rating: 8/10

Analysis: FYT demonstrates strong fundamentals, including a solid track record of outperformance, a reputable issuer, and a unique investment strategy. The ETF's active management approach and focus on small-cap value stocks present potential for above-average returns, but also involve higher risk.

Resources and Disclaimers

• First Trust Website: https://www.firsttrust.com/etfs/fyt
• Morningstar: https://www.morningstar.com/etfs/arcx/fyt/quote
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.