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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 ICE Data Indices, LLC or its affiliates ("IDI") which employs the AlphaDEX® stock selection methodology to select stocks from the Russell 1000® Index.
  • IDI 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 above growth and value factors.
  • IDI then ranks those stocks contained in the utilities sector according to their score. The greater of the top 75% of the eligible universe or 40 stocks is selected for the StrataQuant® Utilities Index.
    • If the total count of eligible stocks in the utilities sector falls below 40, all eligible stocks will be included.
  • 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
TickerFXU
Fund TypeUtilities
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon
CUSIP33734X184
ISINUS33734X1845
Intraday NAVFXUIV
Fiscal Year-End07/31
ExchangeNYSE Arca
Inception5/8/2007
Inception Price$20.00
Inception NAV$20.00
Rebalance FrequencyQuarterly
Gross Expense Ratio*0.63%
Net Expense Ratio*0.63%
* As of 12/2/2019
Expenses are capped contractually at 0.70% per year, at least until November 30, 2020.
Current Fund Data (as of 9/25/2020)
Closing NAV1$26.10
Closing Market Price2$26.11
Bid/Ask Midpoint$26.09
Bid/Ask Discount0.03%
Total Net Assets$200,959,419
Outstanding Shares7,700,002
Daily Volume31,885
Average 30-Day Daily Volume68,982
Closing Market Price 52-Week High/Low$31.83 / $20.75
Closing NAV 52-Week High/Low$31.82 / $20.78
Number of Holdings (excluding cash)40
Fund Characteristics (as of 8/31/2020)8
Maximum Market Cap.$136,695
Median Market Cap.$18,762
Minimum Market Cap.$3,399
Price/Earnings14.01
Price/Book1.78
Price/Cash Flow7.02
Price/Sales1.87
Top Holdings (as of 9/24/2020)*
Holding Percent
Avangrid, Inc. 4.84%
Duke Energy Corporation 4.25%
PPL Corporation 4.20%
UGI Corporation 4.18%
Pinnacle West Capital Corporation 4.13%
Vistra Corp. 4.02%
Exelon Corporation 3.99%
NRG Energy, Inc. 3.71%
Public Service Enterprise Group Incorporated 3.62%
DTE Energy Company 3.50%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt (as of 9/26/2020)3$0.2463
30-Day SEC Yield (as of 8/31/2020)42.88%
Unsubsidized 30-Day SEC Yield (as of 8/31/2020)52.88%
12-Month Distribution Rate (as of 8/31/2020)64.04%
Index Yield (as of 8/31/2020)73.46%
For funds with certain equity strategies, due to the negative economic impact across many industries caused by the recent COVID-19 outbreak, certain of the issuers of the securities included in the fund may elect to reduce the amount of dividends and/or distributions paid in the future. As a result, the "12-Month Distribution Rate," which is based on the fund's trailing 12-month ordinary distributions, will likely be higher, and in some cases significantly higher, than the actual 12-month distribution rate achieved by the fund.
Bid/Ask Midpoint vs. NAV (as of 6/30/2020)
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
6/30/2020 19 0 0 0
3/31/2020 29 0 0 0
12/31/2019 39 0 0 0
9/30/2019 40 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
6/30/2020 44 0 0 0
3/31/2020 33 0 0 0
12/31/2019 25 0 0 0
9/30/2019 24 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.

Top Industry Exposure (as of 9/24/2020)
Electricity 69.83%
Gas, Water and Multi-utilities 24.33%
Waste and Disposal Services 5.84%
Month End Performance (as of 8/31/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) 0.44% -5.47% -2.66% 1.91% 7.09% 9.08% 5.48%
After Tax Held -0.28% -6.42% -4.23% 0.57% 5.71% 7.74% 4.21%
After Tax Sold 0.24% -3.27% -1.59% 0.87% 4.89% 6.71% 3.73%
Market Price 0.48% -5.47% -2.66% 1.91% 7.08% 9.07% 5.47%
Index Performance **
StrataQuant® Utilities Index 0.62% -5.29% -2.27% 2.50% 7.76% 9.89% 6.30%
Russell 1000® Utilities Index 1.13% -7.19% -1.25% 5.78% 9.20% 10.08% N/A
Russell 1000® Index 16.14% 10.43% 22.50% 14.58% 14.31% 15.19% 8.88%
S&P 500 Utilities Index 0.06% -6.73% -2.03% 6.14% 10.72% 10.88% 6.55%
Quarter End Performance (as of 6/30/2020)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception9
Fund Performance *
Net Asset Value (NAV) 6.92% -9.64% -6.56% 1.46% 6.43% 9.25% 5.19%
After Tax Held 6.16% -10.55% -8.08% 0.12% 5.06% 7.91% 3.90%
After Tax Sold 4.10% -5.72% -3.86% 0.55% 4.39% 6.88% 3.49%
Market Price 6.88% -9.65% -6.60% 1.45% 6.43% 9.24% 5.18%
Index Performance **
StrataQuant® Utilities Index 7.16% -9.58% -6.23% 2.04% 7.11% 10.08% 6.01%
Russell 1000® Utilities Index 4.05% -11.82% -2.30% 5.60% 8.06% 10.57% N/A
Russell 1000® Index 21.82% -2.81% 7.48% 10.64% 10.47% 13.97% 7.95%
S&P 500 Utilities Index 2.73% -11.14% -2.11% 6.41% 10.17% 11.31% 6.25%
3-Year Statistics (as of 8/31/2020)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
FXU 13.14% -3.24 0.80 0.07 0.88
S&P 500 Utilities Index 14.55% --- 1.00 0.36 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.

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 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. 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.

**Performance information for the StrataQuant® Utilities 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.

Russell 1000® Utilities Index - The Index is an unmanaged index which includes the stocks in the utilities sector of the Russell 1000® Index.

Russell 1000® Index - The Index is an unmanaged index used to measure the large-cap U.S. equity universe.

S&P 500 Utilities Index - The Index is an unmanaged index which includes the stocks in the utilities sector of the S&P 500 Index.

Footnotes
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 market 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 The unsubsidized 30-day SEC yield is calculated the same as the 30-day SEC yield, however it excludes contractual fee waivers and expense reimbursements.
6 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.
7 Index yield represents the weighted average trailing 12-month dividend of the constituents of the StrataQuant® Utilities Index.
8 All market capitalization numbers are in USD$ Millions.
9 Inception Date is 5/8/2007

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 NYSE Arca, Inc.

The fund's return may not match the return of the StrataQuant® Utilities 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. If the fund's authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a discount to the fund's net asset value and possibly face delisting.

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 security owned by the fund, fund shares or securities in general may fall in value. There can be no assurance that the fund's investment objective will be achieved. The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. The COVID-19 pandemic may last for an extended period of time, and will continue to impact the economy for the foreseeable future.

The fund may invest in small capitalization and mid capitalization companies. Such companies may experience greater price volatility than larger, more established companies.

The fund invests in utilities and telecommunications companies. Utilities companies are subject to imposition of rate caps, increased competition, difficulty in obtaining an adequate return on invested capital or in financing large construction projects, limitations on operations and increased costs attributable to environmental considerations and the capital market's ability to absorb utility debt. Utilities companies may also be affected by taxes, government regulation, international politics, price and supply fluctuations, volatile interest rates and energy conservation. Telecommunications companies are subject to risks, which include increased competition and regulation by various regulatory authorities, the need to commit substantial capital and technological obsolescence.

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.

StrataQuant® and StrataQuant® Utilities Index (“Index”) are service/trademarks of ICE Data Indices, LLC or its affiliates (“IDI”) and have been licensed for use by First Trust in connection with the Fund. The Fund is not sponsored, endorsed, sold or promoted by IDI and IDI makes no representations or warranties 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. IDI and its third party suppliers accept no liability in connection with use of the index or the Fund. See the prospectus for a full copy of the disclaimer.

Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Frank Russell Company does not promote, sponsor or endorse the content of this communication.

"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
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
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