First Trust switches entire AlphaDEX smart beta ETF range to Nasdaq

Apr 7th, 2016 | By | Category: ETF and Index News

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First Trust, a US-based provider of exchange-traded funds, will move all 12 of its AlphaDEX smart beta ETFs from the NYSE to Nasdaq exchange tomorrow, (8 April 2016).

Dave Gedeon Nasdaq

Dave Gedeon, Head of Research & Development, Nasdaq Global Indices.

The move marks the largest single group of changes of AlphaDEX products to date, although the firm had previously switched 17 of their products periodically over the course of last year.

Following the switch, all ETFs will change index provider from S&P and begin tracking Nasdaq indices. The funds will maintain their original ticker codes but their respective indices will be re-branded to reflect the change in provider.

Included in the latest switch is the firm’s most popular US product, the First Trust Large Cap Core AlphaDEX Fund (FEX) which contains roughly $1.5bn in assets under management (AUM). The firm’s total AUM for US and Countries (ex-US) products is approximately $6.0bn.

Dave Gedeon, Head of Research & Development, Nasdaq Global Indices, believes that a significant switch of products such as this is not unique: “You’ll see a handful every year. It’s not the norm, but it’s always a great thing if you are the benchmark to which the ETF is switching.”

Commenting on the benefits to both parties, Gedeon said: “Part of the conversation is aligning the ETF provider and index provider such that they have a joint belief in the product and use opportunities like this to deepen the relationship.” To build on this partnership, Nasdaq’s Research & Development team will work closely with First Trust to enhance the product and boost sales.

First Trust’s AlphaDEX funds employ a proprietary methodology that targets similar correlation and risk characteristics as their fund’s broad market benchmark but also seeks to generate alpha. It achieves this by ranking stocks according to several factors such as growth (including three, six and 12-month price appreciation, sales-to-price and one year sales growth), and value (including book value-to-price, cash flow-to-price and return on assets). By providing exposure to these smart beta characteristics the indices aim to provide superior risk-adjusted performance compared to market-capitalisation weighted benchmarks.

The ETFs and their new indices are:

First Trust Large Cap Core AlphaDEX Fund (FEX)
NASDAQ AlphaDEX Large Cap Core Index
First Trust Large Cap Growth AlphaDEX Fund (FTC)
NASDAQ AlphaDEX Large Cap Growth Index
First Trust Large Cap Value AlphaDEX Fund (FTA)
NASDAQ AlphaDEX Large Cap Value Index
First Trust Mid Cap Core AlphaDEX Fund (FNX)
NASDAQ AlphaDEX Mid Cap Core Index
First Trust Mid Cap Growth AlphaDEX Fund (FNY)
NASDAQ AlphaDEX Mid Cap Growth Index
First Trust Mid Cap Value AlphaDEX Fund (FNK)
NASDAQ AlphaDEX Mid Cap Value Index
First Trust Small Cap Core AlphaDEX Fund (FYX)
NASDAQ AlphaDEX Small Cap Core Index
First Trust Small Cap Growth AlphaDEX Fund (FYC)
NASDAQ AlphaDEX Small Cap Growth Index
First Trust Small Cap Value AlphaDEX Fund (FYT)
NASDAQ AlphaDEX Small Cap Value Index
First Trust Multi Cap Growth AlphaDEX Fund (FAD)
NASDAQ AlphaDEX Multi Cap Growth Index
First Trust Multi Cap Value AlphaDEX Fund (FAB)
NASDAQ AlphaDEX Multi Cap Value Index
First Trust Mega Cap AlphaDEX Fund (FMK)
NASDAQ AlphaDEX Mega Cap Index

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