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FAD ETF ANALYSIS

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FAD ETF FUNDAMENTALS
FAD ETF PERFORMANCE

FAD ISSUER

The First Trust Multi Cap Growth AlphaDEX Fund (FAD) is managed and sponsored by First Trust Advisors L.P., a reputable asset management firm with a long history of providing innovative investment solutions. FAD aims to replicate the performance of the index developed and maintained by Nasdaq, Inc. – the Nasdaq US 500 Large Cap Index, Nasdaq US 600 Mid Cap Index, and Nasdaq US 700 Small Cap Index. The Index Provider, Nasdaq, Inc., uses an AlphaDEX® selection methodology to identify growth stocks within these indices that have the potential to generate positive alpha, making FAD an attractive choice for investors seeking growth opportunities across different market capitalizations.

FAD DIVIDEND

While the primary objective of the First Trust Multi Cap Growth AlphaDEX Fund (FAD) may revolve around capital growth, its dividend distribution is a reflection of the underlying stocks within its Index. FAD generally invests at least 90% of its assets in common stocks that constitute the Index. The dividend eligibility, distribution frequency, and policies of FAD are influenced by the individual dividend practices of the Index's constituent companies, which are selected based on their growth potential and positive alpha generation. Investors in FAD can potentially enjoy dividend returns, although the fund primarily seeks to achieve risk-adjusted growth through the AlphaDEX® selection methodology.

FAD TRACKING

At the essence of the First Trust Multi Cap Growth AlphaDEX Fund (FAD) is the objective to meticulously track the Defined Multi Cap Growth Index. FAD strategically invests in a diverse portfolio of U.S. stocks, emphasizing growth factors. By closely aligning with the index, the ETF provides investors with exposure to a selection of companies exhibiting strong growth potential across various market capitalizations. FAD's adept tracking capabilities make it an appealing choice for investors looking to participate in the dynamic landscape of multi-cap growth stocks.

FAD CORRELATION

The correlation aspect of the First Trust Multi Cap Growth AlphaDEX Fund (FAD) can be challenging to define as it depends on the performance of the underlying index it seeks to replicate. FAD attempts to mirror the performance of the Nasdaq AlphaDEX Multi Cap Growth Index, which selects growth stocks from various market capitalization segments. Consequently, FAD's correlation may vary depending on how growth stocks within the Nasdaq US 500 Large Cap Index, Nasdaq US 600 Mid Cap Index, and Nasdaq US 700 Small Cap Index perform relative to their benchmarks. To gain a deeper understanding of FAD's correlations and its overlap with different market segments, investors can utilize the ETF insider web app, which provides comprehensive data and visualization tools for studying correlations among US ETFs.

FAD SECTOR

The First Trust Multi Cap Growth AlphaDEX Fund (FAD) is primarily focused on the stock market's growth segment. It aims to replicate the performance of the Nasdaq AlphaDEX Growth Index, developed by Nasdaq, Inc. This index selects growth stocks from the Nasdaq US 500 Large Cap Index, Nasdaq US 600 Mid Cap Index, and Nasdaq US 700 Small Cap Index, potentially generating positive alpha (risk-adjusted returns) relative to traditional indices. FAD is composed of stocks from these three size classes, with the selection based on growth and value factors, leading to a concentrated portfolio that may provide opportunities for growth-focused investors. However, this concentration also means the fund may have a higher risk profile compared to more diversified ETFs within its sector.

FAD EXPOSURE

The exposure characteristic of the First Trust Multi Cap Growth AlphaDEX Fund (FAD) is rooted in its aim to provide investors access to growth stocks across different market capitalizations in the United States. FAD seeks to replicate the performance of the Index, which is designed to select growth stocks from the Nasdaq US 500 Large Cap IndexTM, Nasdaq US 600 Mid Cap IndexTM, and Nasdaq US 700 Small Cap IndexTM. By following an AlphaDEX® selection methodology, the fund aims to deliver positive alpha, or risk-adjusted returns, relative to traditional indices. This exposure offers a diversified approach to capturing growth potential within various segments of the U.S. equity market.

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