FXZ Profile
The First Trust Materials AlphaDEX Fund is designed to provide investors with focused exposure to the materials sector, leveraging a distinctive investment approach to potentially enhance returns. Typically, the fund invests at least 90% of its net assets, including any borrowings for investment purposes, in common stocks that are constituents of its benchmark index. This strategic allocation emphasizes stocks within the materials and processing sector, which includes industries such as chemicals, metals, mining, and construction materials.
The fund's underlying index is a modified equal-dollar weighted index that specifically targets stocks from the Russell 1000 Index in the materials sector. This index employs the AlphaDEX selection methodology, a quantitative approach designed to identify and select stocks with the potential to outperform traditional passive indices. By focusing on a range of performance metrics, the methodology aims to uncover stocks that exhibit strong growth potential, value characteristics, and positive momentum.
The AlphaDEX methodology differentiates itself by evaluating stocks based on a variety of factors including earnings growth, valuation ratios, and technical indicators. This data-driven approach seeks to highlight stocks within the materials sector that are likely to generate higher returns compared to their peers. By applying these criteria, the fund aims to capitalize on high-performing stocks and create a portfolio with the potential to deliver superior results relative to a passive investment strategy.
Managed by First Trust, the fund benefits from the companys expertise in innovative investment strategies. The First Trust Materials AlphaDEX Fund offers a targeted investment opportunity for those interested in the materials sector, with a focus on achieving enhanced performance through a sophisticated selection process. This approach provides investors with a strategic way to gain exposure to the materials and processing industry while potentially benefiting from superior stock selection techniques.
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