First Trust US Large Cap Core AlphaDEX UCITS ETF

Issuer: First Trust

Asset Class: Equity

TER: 65bps

Trading Currency: GBX

Pays Income: False

Listing Date: 01 Jun 2015

Ticker: FEXD

ISIN: IE00BWTNMB87

This investment vehicle offers a strategic approach to the U.S. large-cap equity market, moving beyond traditional market-cap weighting. Instead of simply holding the largest U.S. companies based on their size, it employs a proprietary, rules-based methodology known as AlphaDEX®. This quantitative strategy systematically ranks stocks within the Nasdaq US 500 Large Cap Index based on a combination of growth and value factors. Key growth metrics include 3, 6, and 12-month price appreciation, sales-to-price ratio, and one-year sales growth. For value, it considers book value-to-price, cash flow-to-price, and return-on-assets. This multi-factor model aims to identify stocks with the potential for outperformance relative to traditional benchmarks.

By following this disciplined selection and weighting process, the fund constructs a portfolio that is fundamentally different from a standard index tracker. The top-ranked stocks receive higher allocations, while the lowest-ranked are excluded entirely. This results in a portfolio that tilts away from the largest, often overvalued mega-cap names and towards companies that screen favorably on the selected value and growth criteria. For investors, this provides a potential source of alpha, or excess returns, by systematically harvesting factor premiums within the U.S. large-cap universe. It can serve as a core holding for those seeking to enhance their U.S. equity exposure with a "smart beta" strategy that aims to outperform the broader market over the long term.