First Trust Materials AlphaDEX Fund (FXZ)

Overview

The fund described operates with a strategic focus on investing primarily in the materials and processing sector. It seeks to differentiate itself by allocating at least 90% of its net assets in securities that form part of the index it tracks. This index, carefully curated through a modified equal-dollar weighted approach, aims to harvest stocks from the Russell 1000® Index that exhibit the potential for positive alpha generation. Positive alpha, in the context of investment strategies, refers to the ability of a fund to outperform the market or its benchmark index. The underlying selection methodology, known as AlphaDEX®, is designed to objectively identify these high-potential stocks, setting the fund apart from traditional passive investment approaches.

Products and Services

• Russell 1000® Index-based Investment Services

This service encompasses the core of the fund's strategy, focusing on investing in stocks from the Russell 1000® Index within the materials and processing sector. By adhering to a modified equal-dollar weighted index approach, it ensures a balanced and comprehensive coverage of the sector, providing investors with an opportunity to engage in a sector-specific strategy that aims for higher returns through carefully selected stocks.

• AlphaDEX® Selection Methodology

At the heart of the fund's operational framework is the AlphaDEX® selection methodology. This system is engineered to objectively sift through and select stocks from the Russell 1000® Index that may outperform traditional passive indices. By leveraging this methodology, the fund aims to identify stocks that have the potential to generate positive alpha, offering an investment edge to those seeking alternatives to conventional market-cap weighted strategies.