FAD Profile
The First Trust Multi Cap Growth AlphaDEX Fund seeks to provide investors with a diversified portfolio of growth-oriented stocks across large, mid, and small-cap segments of the U.S. equity market. The fund aims to replicate the performance of the NASDAQ AlphaDEX Multi Cap Growth Index, which identifies and selects growth stocks from the NASDAQ US 500 Large Cap Index, NASDAQ US 600 Mid Cap Index, and NASDAQ US 700 Small Cap Index. These stocks are chosen using the AlphaDEX selection methodology, designed to generate positive alpha, or superior risk-adjusted returns, compared to traditional market indices.
The AlphaDEX methodology employed by the fund's underlying index involves a multifactor screening process that ranks stocks based on various growth metrics, such as earnings growth, price momentum, and sales growth. This approach ensures that the fund's portfolio is weighted towards companies demonstrating strong growth potential, thereby providing investors with exposure to stocks that are expected to outperform the broader market. Unlike traditional market-cap-weighted indices, this methodology allows for a more dynamic and potentially higher-performing growth-oriented portfolio.
The First Trust Multi Cap Growth AlphaDEX Fund typically allocates at least 90% of its net assets to the common stocks that comprise the index. By focusing on growth stocks across different market capitalizations, the fund offers a broad and diversified exposure to companies that are positioned for rapid expansion. This multi-cap strategy allows the fund to tap into growth opportunities across the full spectrum of the U.S. equity market, from well-established industry leaders to innovative and fast-growing smaller companies.
As a passively managed exchange-traded fund (ETF), the First Trust Multi Cap Growth AlphaDEX Fund strives to closely track the performance of its underlying index while maintaining low costs for investors. The fund is well-suited for those seeking a growth-oriented investment strategy that leverages a systematic and disciplined stock selection process. Its diversified nature across large, mid, and small-cap growth stocks makes it an attractive option for investors looking to capture growth potential across various segments of the U.S. equity market.
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