(FXN) First Trust Energy AlphaDEX - Ratings and Ratios

The First Trust Energy AlphaDEX Fund (FXN) is an actively managed ETF that focuses on the energy sector, aiming to outperform traditional passive indices through its AlphaDEX selection methodology. This methodology involves a rules-based approach to identify stocks from the Russell 1000 Index that are likely to generate positive alpha.

By investing at least 90% of its net assets in the securities that comprise its index, FXN provides a concentrated exposure to the energy sector. The funds modified equal-dollar weighted index ensures that the constituent stocks are weighted in a way that maximizes the potential for alpha generation, rather than being market-cap weighted like traditional indices.

From a performance perspective, key metrics to consider include the funds tracking error, information ratio, and Sharpe ratio. A lower tracking error would indicate that the fund is closely following its index, while a higher information ratio would suggest that the fund is generating excess returns relative to its benchmark. The Sharpe ratio, meanwhile, provides insight into the funds risk-adjusted returns.

In terms of its investment universe, FXN draws from the Russell 1000 Index, which comprises large-cap US stocks. The energy sector is a significant component of this index, and FXNs AlphaDEX methodology is designed to identify the most promising stocks within this sector. Other key performance indicators (KPIs) for FXN might include its dividend yield, sector allocation, and holdings turnover.

To evaluate FXNs performance, investors may also want to consider its expense ratio, trading volume, and bid-ask spread. A lower expense ratio would indicate lower costs for investors, while higher trading volume and a narrower bid-ask spread would suggest greater liquidity and tighter trading costs.