First Trust Emerging Markets Small Cap AlphaDEX Fund (FEMS)

Overview

The organization primarily engages in investment activities, specifically aimed at operating a fund that seeks to invest a majority of its assets—no less than 90% of its net assets, including borrowed investments—in securities that form part of the index it tracks. This particular index is carefully selected from the NASDAQ Emerging Markets Index, referred to as the "base index," but with a strategic focus on stocks that are evaluated to potentially yield positive alpha, or risk-adjusted returns. Positive alpha signifies the fund's performance in comparison to traditional indices, with an emphasis on outperforming them through calculated risk and return adjustments. This is achieved by employing the AlphaDEX® selection methodology, a distinctive investment strategy designed to identify stocks that have the potential to outperform their peers and the broader market landscape within emerging markets.

Products and Services

• Emerging Markets Equity Investment

  A core service provided involves investing in equities within emerging markets. This service capitalizes on the growth potential of emerging economies by investing in a diversified portfolio of stocks selected from the NASDAQ Emerging Markets Index. By focusing on these markets, the fund offers investors exposure to a potentially high-growth sector.

• AlphaDEX® Selection Methodology

  This distinctive service is based on a proprietary investment strategy known as the AlphaDEX® selection methodology. This approach is designed to identify and invest in stocks that exhibit the potential for higher alpha, or risk-adjusted returns, than what traditional market indices might offer. It evaluates various stocks from the base index for their potential to outperform, aiming to create a diversified portfolio that seeks to exceed the returns of traditional emerging market investments.