FXD Profile
The First Trust Consumer Discretionary AlphaDEX Fund is designed to provide investors with exposure to the consumer discretionary sector through a distinct and quantitative investment approach. The fund allocates at least 90% of its net assets, including any borrowings for investment purposes, into common stocks that are constituents of the underlying index. This investment strategy focuses on capturing potential growth opportunities within the consumer discretionary sector, a key area of the economy that encompasses a wide range of goods and services that consumers may choose to purchase when their finances allow.
The underlying index for the fund is a modified equal-dollar weighted index, specifically created to identify and select stocks from the Russell 1000 Index that are part of the consumer discretionary sector. The index employs the AlphaDEX selection methodology, which is designed to enhance performance by focusing on stocks that may outperform traditional passive indices. This methodology uses a rules-based approach to screen and rank stocks based on a combination of fundamental and technical factors, aiming to generate positive alpha and deliver superior returns compared to conventional index-tracking strategies.
The AlphaDEX methodology used in the index integrates various factors, including growth rates, valuation metrics, and momentum indicators. This approach helps to identify stocks with higher potential for outperformance, offering a dynamic and proactive alternative to static index investing. By applying these criteria, the fund seeks to capture opportunities within the consumer discretionary sector that may be overlooked by more traditional investment strategies.
Managed by First Trust, the fund leverages its expertise in creating innovative and performance-driven investment solutions. The First Trust Consumer Discretionary AlphaDEX Fund is tailored for investors looking to gain targeted exposure to the consumer discretionary sector while benefiting from an investment process that aims to deliver alpha through strategic stock selection. This fund provides a focused approach to investing in a sector known for its potential growth and cyclical characteristics, making it a suitable option for investors seeking sector-specific gains and diversified exposure.
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