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First Trust Utilities AlphaDEX® Fund (FXU)
Investment Objective/Strategy - The First Trust Utilities AlphaDEX® Fund is an exchange-traded fund. The investment objective of the Fund is to seek investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the StrataQuant® Utilities Index.
 
There can be no assurance that the Fund's investment objectives will be achieved.
  • The StrataQuant® Utilities Index is an "enhanced" index developed, maintained and sponsored by the NYSE Euronext or its affiliates ("NYSE Euronext") which employs the AlphaDEX® stock selection methodology to select stocks from the Russell 1000® Index. Prior to the acquisition of the American Stock Exchange LLC (“AMEX”) by NYSE Euronext, the index was developed, maintained and sponsored by the AMEX.
  • The NYSE Euronext constructs the StrataQuant® Utilities Index by ranking the stocks which are members of the Russell 1000® Index on growth factors including three, six and 12-month price appreciation, sales to price and one year sales growth, and, separately, on value factors including book value to price, cash flow to price and return on assets.
  • Stocks which Russell has classified solely as growth or value, receive their score using the above growth or value factors respectively.
  • Stocks which Russell allocates between both growth and value receive their best score between the growth and value factors.
  • The NYSE Euronext then ranks those stocks contained in the the utilities sector (the members of the Russell 1000® Utilities Index) according to their score. The bottom 25% is eliminated and the top 75% is selected for the StrataQuant® Utilities Index.
  • The selected stocks are divided into quintiles based on their rankings and the top ranked quintiles receive a higher weight within the index. The stocks are equally-weighted within each quintile.
  • The index is reconstituted and rebalanced quarterly.
Fund Overview
Ticker FXU
Fund Type Utilities
Investment Advisor First Trust Advisors L.P.
Investor Servicing Agent Bank of New York
CUSIP 33734X184
Intraday NAV FXUIV
Fiscal Year-End 07/31
Exchange NYSE Arca
Inception 5/8/2007
Inception Price $20.00
Inception NAV $20.00
Gross Expense Ratio
(7/31/2009)		 1.15%
Net Expense Ratio 0.70%
Rebalance Frequency QUARTERLY
Marginable Yes
Options Yes
Short Sell Yes
Pursuant to contract, First Trust has agreed to waive fees and/or pay fund expenses to prevent the net expense ratio of the fund from exceeding 0.70% per year, at least until March 31, 2010.
Bid/Ask Midpoint and NAV History (Since Inception)
 
Past performance is not indicative of future results.
Current Fund Data (as of 2/5/2010)
Closing Share Price $14.32
Bid/Ask Midpoint $14.33
Closing NAV $14.32
Bid/Ask Premium 0.06%
Total Net Assets $27,211,158
Common Shares Outstanding 1,900,002
Dividend Frequency Semi-Annual
Dividend per Share Amt1 $0.1451
Daily Volume 28,666
Average 30-Day Daily Volume 27,519
Closing Share Price 52-Week High/Low $15.70 / $9.87
Closing NAV 52-Week High/Low $15.66 / $9.86
Number of Stocks 56
Top 10 Holdings (as of 2/8/2010)
Holdings Percent (%)
Southern Union Company 3.16
Westar Energy, Inc. 3.14
DTE Energy Company 3.12
NiSource Inc. 3.10
Pepco Holdings, Inc. 3.09
NRG Energy Inc. 2.99
Time Warner Telecom Inc. 2.96
NV Energy Inc. 2.95
Energen Corporation 2.94
Ameren Corporation 2.86

Fund Characteristics (as of 1/29/2010) 3,4
30-Day SEC Yield (as of 12/31/2009) 3.06%
Distribution Rate (as of 12/31/2009) 1.88%
Median Market Cap. $5,440
Maximum Market Cap. $149,675
Minimum Market Cap. $1,021
Price/Earnings 11.31
Price/Book 1.15
Price/Cash Flow 4.41
Price/Sales 0.87
Number of Days Bid/Ask Midpoint Above NAV
Quarter Ended 0-49
Basis Points		 50-99
Basis Points		 100-199
Basis Points		 >=200
Basis Points
12/31/2009 52 0 0 0
9/30/2009 38 0 0 0
6/30/2009 25 2 0 0
3/31/2009 22 0 0 0
Number of Days Bid/Ask Midpoint Below NAV
Quarter Ended 0-49
Basis Points		 50-99
Basis Points		 100-199
Basis Points		 >=200
Basis Points
12/31/2009 12 0 0 0
9/30/2009 26 0 0 0
6/30/2009 34 2 0 0
3/31/2009 39 0 0 0

The price used to calculate market return is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange, on which shares of the Fund are listed for trading, as of the time that the Fund's NAV is calculated.
Month End Performance   (as of 1/29/2010) 
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception2
 Fund Performance *
NAV 6.56% -5.07% 20.61% N/A N/A N/A -7.70%
After Tax Held 6.21% -5.07% 19.30% N/A N/A N/A -8.80%
After Tax Sold 4.28% -3.29% 13.35% N/A N/A N/A -7.07%
Market Price 6.49% -5.07% 20.34% N/A N/A N/A -7.73%
 Index Performance **
StrataQuant® Utilities Index 6.75% -5.01% 21.73% N/A N/A N/A -6.89%
Russell 1000® Utilities Index 4.09% -6.32% 9.46% N/A N/A N/A N/A
S&P 500 Utilities Index 5.16% -4.93% 7.09% N/A N/A N/A -8.80%
Russell 1000® Index 4.57% -3.60% 34.81% N/A N/A N/A -9.51%
Quarter End Performance   (as of 12/31/2009) 
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception2
 Fund Performance *
NAV 7.66% 22.54% 22.54% N/A N/A N/A -6.11%
After Tax Held 7.31% 21.21% 21.21% N/A N/A N/A -7.27%
After Tax Sold 4.98% 14.56% 14.56% N/A N/A N/A -5.80%
Market Price 7.59% 22.84% 22.84% N/A N/A N/A -6.14%
 Index Performance **
StrataQuant® Utilities Index 7.87% 23.65% 23.65% N/A N/A N/A -5.27%
Russell 1000® Utilities Index 6.94% 11.17% 11.17% N/A N/A N/A N/A
S&P 500 Utilities Index 7.26% 11.91% 11.91% N/A N/A N/A -7.30%
Russell 1000® Index 6.07% 28.43% 28.43% N/A N/A N/A -8.52%
*Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost. You can obtain performance information which is current through the most recent month-end by visiting ftportfolios.com.
After Tax Held returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold returns represent the return after taxes on distributions and the sale of fund shares. Returns do not represent the returns you would receive if you traded shares at other times. Market Price returns are based on the midpoint of the bid/ask spread. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative. The fund's performance reflects fee waivers and expense reimbursements, absent which performance would have been lower.
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
The gross expense ratio for this fund is 1.15%. Pursuant to contract, First Trust has agreed to waive fees and/or pay fund expenses to prevent the net expense ratio of the fund from exceeding 0.70% per year, at least until March 31, 2010. 		**Past performance is not a guarantee of future results. Performance information for the StrataQuant® Utilities Index is for illustrative purposes only and does not represent the performance of any actual investment or fund. No representation is being made that any investment will achieve performance similar to that shown. The index does not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Indexes are unmanaged and an investor cannot invest directly in an index. All index returns assume that dividends are reinvested when they are received.

The Russell 1000 Index is an unmanaged index used to measure the large-cap U.S. equity universe.
The Russell 1000 Utilities Index is an unmanaged index which includes the stocks in the utilities sector of the Russell 1000 Index.
Footnotes
1 Most recent distribution paid or declared through today's date. Subject to change in the future.
2 Inception Date is 5/8/2007
3 30-day SEC yield is calculated by dividing the net investment income per share earned during the most recent 30-day period by the maximum offering price per share on the last day of the period.
Distribution rate is calculated by dividing the most recent annualized distribution paid or declared by the market price.
4 All market capitalization numbers are in US$ Millions.

Downloads and Links to Recently Posted Fund Information
• FXU Recap of Capital Gains Distributions for 2009 – 12/31/2009
• First Trust Exchange-Traded AlphaDEX® Fund 19a-1 Notice - 12/31/2009
• First Trust Advisors L.P. Announces Distributions for Exchange-Traded Funds - 12/21/2009
• Exchange-Traded Funds advised by First Trust Advisors L.P. Announce Distributions - 6/22/2009
• FXU Recap of Capital Gains Distributions for 2008 - 12/23/2008
• FXU Declares Distributions 12/22/2008
• Exchange-Traded Funds Begin Trading on NYSE Arca, Inc. - 11/6/2008
• Transfer of Exchange-Traded Fund Securities from American Stock Exchange to NYSE Arca 10/6/2008
• FXU Annual Report for the period ending 7/31/2009
• ETF Quarterly Performance Report
• Prospectus
• Click here to view all the downloads for this fund.

You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or contact First Trust Portfolios, L.P. at 1-800-621-1675 to request a prospectus, which contains this and other information about the fund. Read it carefully before you invest.

Risk Considerations:
The fund's shares will change in value, and you could lose money by investing in the fund. One of the principal risks of investing in the fund is market risk. Market risk is the risk that a particular stock owned by the fund, fund shares or stocks in general may fall in value.

The fund's return may not match the return of the StrataQuant® Utilities Index. The fund may not be fully invested at times. Securities held by the fund will generally not be bought or sold in response to market fluctuations. The fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Investors who sell fund shares may receive less than the share's net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from the fund by authorized participants, in very large creation/redemption units.

This fund is concentrated in stocks in the utilities sector which involves additional risks, including limited diversification. The companies engaged in the utilities sector are subject to certain risks, including price and supply fluctuations caused by international politics, energy conservation, taxes, and other regulatory policies of various governments.

The StrataQuant® Utilities Index is a trademark of NYSE Euronext and has been licensed for use by First Trust Portfolios L.P. The fund is not sponsored, endorsed, sold or promoted by NYSE Euronext and NYSE Euronext makes no representation or warranty regarding the advisability of investing in the fund or as to the result to be obtained by any person from use of the index in connection with the trading of the fund.

Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of the Russell Investment Group.

"AlphaDEX®" is a registered trademark of First Trust Portfolios L.P.

A patent application with respect to the AlphaDEX® stock selection methodology is pending at the United States Patent and Trademark Office.

The Fund is classified as "non-diversified." A non-diversified fund generally may invest a larger percentage of its assets in the securities of a smaller number of issuers. As a result, the Fund may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence affecting these companies.

Not FDIC Insured * Not Bank Guaranteed * May Lose Value
 
 
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
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