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First Trust China AlphaDEX® Fund (FCA)
Investment Objective/Strategy - The First Trust China 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 the Fund's fees and expenses, of an equity index called the NASDAQ AlphaDEX® China Index.
There can be no assurance that the Fund's investment objectives will be achieved.
  • The NASDAQ AlphaDEX® China Index is an "enhanced" index created and administered by Nasdaq, Inc. ("Nasdaq") which employs the AlphaDEX® stock selection methodology to select stocks from the NASDAQ China Index that meet certain criteria.
  • Nasdaq constructs the NASDAQ AlphaDEX® China Index by ranking the eligible stocks from the NASDAQ China Index on growth factors including 3-, 6- 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. All stocks are ranked on the sum of ranks for the growth factors and, separately, all stocks are ranked on the sum of ranks for the value factors. A stock must have data for all growth and/or value factors to receive a rank for that style.
  • Each stock receives the best style rank from the previous step as its selection score.
  • The top 50 stocks based on the selection score determined in the previous step comprise the "selected stocks". 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.
  • Each stock is then tested in order of its selection score rank to check if the weight assigned to that stock is outside the sector weighting constraints, which are set at 15% above the benchmark weight.
    • If the weight assigned to the stock, when added with the weight assigned to all higher ranking stocks in its sector, is greater than the constraint, then the stock's weight is lowered to the highest rank in the next quintile. Stocks previously lower in rank then move up one rank. Such stocks in the lowest quintile that violate a constraint are removed from the portfolio and replaced by the highest scoring stock not originally selected, subject to sector constraints. This process continues until all the sector weightings meet the constraint.
  • The index is reconstituted and rebalanced semi-annually.
Fund Overview
Fund TypeInternational Equity
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBrown Brothers Harriman
Fiscal Year-End12/31
Inception Price$29.90
Inception NAV$29.90
Rebalance FrequencySemi-Annual
Expense Ratio0.80%
Current Fund Data (as of 5/23/2016)
Closing NAV1$17.74
Closing Share Price2$17.81
Bid/Ask Midpoint$17.65
Bid/Ask Discount0.52%
Total Net Assets$3,548,415
Outstanding Shares200,002
Daily Volume0
Average 30-Day Daily Volume10,934
Closing Share Price 52-Week High/Low$29.78 / $16.25
Closing NAV 52-Week High/Low$29.36 / $16.68
Number of Holdings51
Fund Characteristics (as of 4/29/2016)7
Maximum Market Cap.$189,282
Median Market Cap.$5,220
Minimum Market Cap.$2,096
Price/Cash Flow7.49
Top Holdings (as of 5/23/2016)
Holding Percent
China Communications Services Corp. Ltd. (Class H) 4.70%
Sinopharm Group Co. Ltd. (Class H) 4.35%
CNOOC Limited 4.27%
Guangzhou R&F Properties Company Limited (Class H) 3.95%
SINOPEC Engineering (Group) Co., Ltd. (Class H) 3.56%
China Zhongwang Holdings Ltd. 3.47%
Belle International Holdings Limited 3.05%
China Telecom Corporation Limited (Class H) 3.04%
Dalian Port (PDA) Company Ltd. 2.97%
Dongfeng Motor Group Company Ltd. (Class H) 2.87%

Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt3$0.1627
30-Day SEC Yield (as of 4/29/2016)42.99%
12-Month Distribution Rate (as of 4/29/2016)54.41%
Index Yield (as of 4/29/2016)63.40%
Bid/Ask Midpoint vs. NAV (as of 3/31/2016)
Number of Days Bid/Ask Midpoint Above NAV
Quarter Ended 0-49
Basis Points
Basis Points
Basis Points
Basis Points
3/31/2016 9 4 1 0
12/31/2015 16 10 3 0
9/30/2015 12 3 2 1
6/30/2015 20 14 12 5
Number of Days Bid/Ask Midpoint Below NAV
Quarter Ended 0-49
Basis Points
Basis Points
Basis Points
Basis Points
3/31/2016 19 18 8 2
12/31/2015 17 14 4 0
9/30/2015 16 17 11 2
6/30/2015 9 2 1 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.

Top Sector Exposure (as of 5/23/2016)
Financials 22.69%
Industrials 15.13%
Consumer Discretionary 14.27%
Information Technology 13.79%
Materials 10.16%
Telecommunication Services 7.77%
Energy 7.02%
Health Care 5.01%
Utilities 3.58%
Consumer Staples 0.58%
Month End Performance (as of 4/29/2016)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) 8.12% -7.70% -33.32% -2.69% -5.88% N/A -6.02%
After Tax Held 8.12% -7.70% -34.42% -4.03% -6.89% N/A -7.02%
After Tax Sold 4.59% -4.36% -18.78% -2.58% -4.71% N/A -4.80%
Market Price 8.36% -7.93% -35.05% -3.02% -6.28% N/A -6.14%
Index Performance **
NASDAQ AlphaDEX® China Index 10.37% -6.28% N/A N/A N/A N/A N/A
MSCI China Index 8.86% -4.99% -30.58% 0.50% -1.25% N/A -1.39%
NASDAQ China Index 9.12% -5.31% -28.20% 1.84% N/A N/A N/A
S&P China BMI Index 9.24% -5.48% -26.43% 2.61% -0.70% N/A -0.82%
Quarter End Performance (as of 3/31/2016)
  3 Mos YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) -6.74% -6.74% -16.65% -2.25% N/A N/A -5.92%
After Tax Held -6.74% -6.74% -18.02% -3.60% N/A N/A -6.94%
After Tax Sold -3.81% -3.81% -9.33% -2.26% N/A N/A -4.74%
Market Price -7.06% -7.06% -17.45% -2.62% N/A N/A -6.06%
Index Performance **
NASDAQ AlphaDEX® China Index -5.89% -5.89% N/A N/A N/A N/A N/A
MSCI China Index -4.80% -4.80% -18.84% 0.94% N/A N/A -1.38%
NASDAQ China Index -5.43% -5.43% -15.68% 2.25% N/A N/A N/A
S&P China BMI Index -5.54% -5.54% -14.43% 3.02% N/A N/A -0.85%
3-Year Statistics (as of 4/29/2016)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FCA 25.36% -5.05 1.10 0.00 0.96
MSCI China Index 21.64% -2.01 0.97 0.11 0.98
NASDAQ China Index 21.81% -0.72 0.98 0.17 0.99
S&P China BMI Index 21.98% --- 1.00 0.21 1.00
Standard Deviation is a measure of price variability (risk). Alpha is an indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.Beta is a measure of price variability relative to the market. Sharpe Ratio is a measure of excess reward per unit of volatility. Correlation is a measure of the similarity of performance.

*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.

Following the close of trading on July 13, 2015, the fund's underlying index changed from the Defined China Index to the NASDAQ AlphaDEX® China Index. Therefore, the fund's performance and historical returns shown for the periods prior to this date are not necessarily indicative of the performance that the fund, based on its current index, would have generated.

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.

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.

**Performance information for the NASDAQ AlphaDEX® China Index is for illustrative purposes only and does not represent actual fund performance.
Indexes do 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.
The expense ratio for this fund is 0.80%.

MSCI China Index - The Index measures the performance of the domestic market of China.

NASDAQ China Index - The Index is a float adjusted market capitalization-weighted index designed to track the performance of securities assigned to China.

S&P China BMI Index - The Index is a comprehensive, rules-based index measuring performance of the equity market in China.

1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares .
2 Fund shares are purchased and sold on an exchange at their share price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 Most recent distribution paid or declared to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
4 The 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 and includes the effects of fee waivers and expense reimbursements, if applicable.
5 12-Month Distribution Rate is calculated by dividing the sum of the fund's trailing 12-month ordinary distributions paid or declared by the NAV price. Distribution rates may vary.
6 Index yield represents the weighted average trailing 12-month dividend of the constituents of the NASDAQ AlphaDEX® China Index.
7 All market capitalization numbers are in USD$ Millions.
8 Inception Date is 4/18/2011

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

ETF Characteristics

The fund lists and principally trades its shares on The Nasdaq Stock Market LLC.

The fund's return may not match the return of the NASDAQ AlphaDEX® China Index.  Securities held by the fund will generally not be bought or sold in response to market fluctuations.

Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Market prices may differ to some degree from the net asset value of the shares. 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, unlike mutual funds, shares may only be redeemed directly from the fund by authorized participants, in very large creation/redemption units.

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. There can be no assurance that the fund's investment objective will be achieved.

The fund may invest in securities issued by companies concentrated in a particular industry. The fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

An investment in a fund containing securities of non-U.S. issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers. These risks may be heightened for securities of companies located in, or with significant operations in, emerging market countries.

The economy of China differs, often unfavorably, from the U.S. economy in such respects as structure, general development, government involvement, wealth distribution, rate of inflation, growth rate, allocation of resources and capital reinvestment, among others. The central government has historically exercised substantial control over virtually every sector of the Chinese economy through administrative regulation and/or state ownership. Actions of the Chinese central and local government authorities continue to have a substantial effect on economic conditions in China. Furthermore, China's economy is dependent on the economies of other Asian countries and can be significantly affected by currency fluctuations and increasing competition from Asia's other emerging economies.

The fund may invest in depositary receipts which may be less liquid than the underlying shares in their primary trading market. The fund may effect a portion of creations and redemptions for cash, rather than in-kind securities. As a result, the fund may be less tax-efficient.

The fund is classified as "non-diversified" and may invest a relatively high percentage of its assets in a limited number of issuers. As a result, the fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.

First Trust Advisors L.P. is the adviser to the fund. First Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P., the fund's distributor.

The NASDAQ AlphaDEX® China Index (the "Index") is a trademark of Nasdaq, Inc. and has been licensed for use by First Trust Portfolios L.P. AlphaDEX® is a trademark owned by First Trust Portfolios L.P. and has been licensed to Nasdaq, Inc. for use in the name of the Index. The First Trust China AlphaDEX® Fund is not sponsored, endorsed, sold or promoted by Nasdaq, Inc. and Nasdaq, Inc. makes no representation or warranty regarding the advisability of investing in the First Trust China AlphaDEX® Fund or as to the result to be obtained by any person from use of the Index in connection with the trading of the First Trust China AlphaDEX® Fund.

"AlphaDEX®" is a registered trademark of First Trust Portfolios L.P. First Trust Portfolios L.P. has obtained a patent for the AlphaDEX® stock selection methodology from the United States Patent and Trademark Office.

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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