FXU Profile
The First Trust Utilities AlphaDEX Fund aims to provide investors with targeted exposure to the utilities sector, utilizing a specialized investment strategy to enhance potential returns. Under normal conditions, the fund allocates at least 90% of its net assets, including any borrowings, to common stocks that are included in its underlying index. This focus on the utilities sector is designed to capture opportunities within a vital segment of the economy, which encompasses essential services such as electricity, water, and natural gas.
The underlying index utilized by the fund is a modified equal-dollar weighted index, specifically tailored to represent the utilities sector of the Russell 1000 Index. This index incorporates a rigorous selection process through the AlphaDEX methodology, which is designed to identify stocks with the potential to outperform traditional passive indices. The methodology employs a quantitative approach to evaluate various factors including growth prospects, value metrics, and momentum, to select stocks that exhibit strong potential for positive performance.
The AlphaDEX selection process is distinguished by its focus on factors such as earnings growth, return on assets, and relative strength. By analyzing these and other investment metrics, the index seeks to identify utilities sector stocks that are likely to deliver higher returns compared to their peers. This active approach aims to generate alpha by focusing on stocks that demonstrate superior characteristics and performance potential within the sector.
Managed by First Trust, the fund leverages the companys expertise in applying advanced investment strategies. The First Trust Utilities AlphaDEX Fund provides a strategic avenue for investors interested in the utilities sector, aiming to capitalize on high-potential stocks identified through a sophisticated selection process. This fund represents a focused investment choice for those looking to benefit from the utilities sector while pursuing enhanced performance through the AlphaDEX methodology.
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