FXD | First Trust Consumer Discretionary AlphaDEX Fund

FXD ISSUER

First Trust Advisors L.P., as the issuer of the FXD fund, adheres to a disciplined investment strategy primarily focused on tracking the performance of the custom-enhanced index developed by ICE Data Indices, LLC or its affiliates. This index, known as the StrataQuant® Series, operates within the framework of the AlphaDEX® selection methodology to identify stocks within the consumer discretionary sector of the Russell 1000® Index that possess potential for generating positive alpha. The Index Provider employs a meticulous process of stock selection, utilizing both growth and value factors to classify securities and determine their inclusion in the index. Through quarterly rebalancing and reconstitution, the fund maintains alignment with the index's composition, subjecting itself to potential portfolio turnover. As of October 31, 2023, the index comprised 121 securities, reflecting a diverse market capitalization range. The fund's investments may vary accordingly, potentially exposing it to concentrated industry risks and fluctuations in different jurisdictions or sectors. Thus, First Trust Advisors L.P. aims to navigate market dynamics while seeking to capture opportunities for enhanced returns within the consumer discretionary sector.

FXD DIVIDEND

As an exchange-traded fund (ETF), FXD, managed by First Trust Advisors L.P., may distribute dividends to its shareholders based on the dividends received from the underlying securities within the fund's portfolio. The dividend yield of FXD is influenced by several factors, including the dividend policies of the companies held within the fund, the overall performance of the stock market, and the ETF's expense ratio. Since FXD focuses on the consumer discretionary sector of the market, the dividend yield may fluctuate depending on the financial health and dividend policies of companies within this sector. Investors interested in FXD's dividend payments should monitor the fund's dividend history and consider consulting with a financial advisor for personalized investment advice.

FXD TRACKING

FXD, an exchange-traded fund (ETF) managed by First Trust Advisors L.P., aims to track the performance of the custom-enhanced index developed by ICE Data Indices, LLC or its affiliates. This index, known as the StrataQuant® Series, utilizes the AlphaDEX® selection methodology to identify and select stocks within the consumer discretionary sector of the Russell 1000® Index. FXD employs an indexing investment approach, seeking to replicate the performance of the index before fees and expenses. The fund's tracking success is dependent on its ability to mirror the index's composition and performance through periodic rebalancing and portfolio adjustments. Investors interested in FXD's tracking performance should assess its tracking error, which measures the divergence between the fund's returns and the index it aims to replicate, and consider other factors such as liquidity, expense ratio, and trading costs.

FXD CORRELATION

The correlation of FXD, managed by First Trust Advisors L.P., is influenced by its underlying holdings and their respective correlation with the index it tracks. As an ETF designed to replicate the performance of the custom-enhanced index developed by ICE Data Indices, LLC, FXD's correlation is primarily determined by the correlation of its constituent stocks with the index. Since FXD focuses on the consumer discretionary sector of the Russell 1000® Index, its correlation is influenced by the correlation of stocks within this sector with the broader market and economic factors affecting consumer spending. Additionally, FXD's correlation may vary over time due to changes in market conditions, sector performance, and individual stock movements. Investors analyzing FXD's correlation should consider its historical correlation with the index, sector-specific trends, and potential diversification benefits when constructing a portfolio.

FXD SECTOR

FXD, managed by First Trust Advisors L.P., focuses on the consumer discretionary sector of the market. The fund's sector allocation is aligned with the custom-enhanced index it tracks, which is developed by ICE Data Indices, LLC. This index, known as the StrataQuant® Series, utilizes the AlphaDEX® selection methodology to identify and select stocks within the consumer discretionary sector of the Russell 1000® Index. As a result, FXD's portfolio primarily consists of companies operating in industries such as retail, leisure, automotive, and other consumer-oriented businesses. The fund's sector-specific exposure is subject to changes in consumer spending patterns, economic conditions, and sector performance. Investors interested in FXD's sector allocation should analyze the composition of the fund's portfolio and consider how it aligns with their investment objectives and risk tolerance.

FXD EXPOSURE

FXD, managed by First Trust Advisors L.P., provides exposure to the consumer discretionary sector of the market. The fund's exposure is primarily determined by its underlying holdings, which are selected based on the custom-enhanced index developed by ICE Data Indices, LLC. This index, part of the StrataQuant® Series, utilizes the AlphaDEX® selection methodology to identify and select stocks within the consumer discretionary sector of the Russell 1000® Index. Consequently, FXD offers investors exposure to companies engaged in industries such as retail, leisure, automotive, and other consumer-driven sectors. The fund's exposure reflects the performance and characteristics of the consumer discretionary sector, including factors such as consumer spending trends, economic conditions, and industry-specific dynamics. Investors seeking exposure to this sector may consider FXD as a potential investment option, understanding its underlying holdings and the risks associated with investing in consumer-oriented businesses.