First Trust Emerging Markets AlphaDEX UCITS ETF

Issuer: First Trust

Asset Class: Equity

TER: 80bps

Trading Currency: USD

Pays Income: False

Listing Date: 22 Apr 2014

Ticker: FEMU

ISIN: IE00B8X9NX34

This fund offers a strategic approach to investing in emerging market equities, moving beyond conventional market-cap weighting. It employs the proprietary AlphaDEX® methodology, a quantitative, rules-based strategy designed to identify and select stocks with the potential for outperformance. The selection process involves ranking all eligible companies from the underlying emerging markets universe based on a combination of growth and value factors. Key growth metrics include price appreciation over various periods and sales growth, while value factors focus on ratios like book value-to-price and cash flow-to-price. This dual-factor screening aims to build a portfolio of fundamentally sound companies that are attractively valued.

By systematically tilting the portfolio towards these selected stocks, the fund seeks to generate alpha over traditional passive emerging market benchmarks. The top-ranked securities are over-weighted, while the lowest-ranked are excluded, resulting in a portfolio that is distinct from its market-cap-weighted peers. This investment is suitable for those looking to enhance their emerging markets allocation with a disciplined, factor-based strategy. It provides a potential avenue for higher returns by focusing on stocks with strong fundamental characteristics, offering a compelling alternative for investors seeking to capture the dynamic growth of emerging economies through a sophisticated, index-based lens.