FXN Profile
The First Trust Energy AlphaDEX Fund is designed to offer investors focused exposure to the energy sector, leveraging a distinctive investment strategy to capture sector-specific opportunities. Typically, the fund invests at least 90% of its net assets, including any borrowings, in the common stocks that are components of the underlying index. This investment approach targets the energy sector, known for its significant role in the global economy and its potential for substantial returns based on market conditions and sector dynamics.
The index used by the fund is a modified equal-dollar weighted index, which is specifically constructed to reflect the performance of energy sector stocks within the Russell 1000 Index. The index employs the AlphaDEX selection methodology, a systematic process designed to identify stocks with strong potential for outperformance. This methodology assesses a range of investment factors, including growth rates, value metrics, and momentum, to select stocks that are expected to deliver superior returns compared to traditional passive indices.
The AlphaDEX selection process involves a quantitative approach that prioritizes stocks showing promising characteristics such as high growth potential, favorable valuation, and positive momentum. This approach aims to generate positive alpha by actively identifying and investing in energy sector stocks that are likely to outperform their peers. The fund's strategy thus diverges from passive investing by focusing on stocks with high potential based on comprehensive factor analysis.
Managed by First Trust, the fund capitalizes on the company's expertise in applying advanced investment techniques. The First Trust Energy AlphaDEX Fund is an attractive option for investors seeking targeted exposure to the energy sector while benefiting from a strategy designed to enhance performance through rigorous stock selection. This fund offers a strategic way to invest in energy, aiming to achieve superior returns by focusing on high-potential stocks within the sector.
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