FEP is a smart beta fund as the ETF’s 202 holdings are selected based “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,” according to First Trust. [Unheralded Europe ETF Idea]
Alternative indexing has been advantage this year for several such Europe ETFs, including FEP. The First Trust offering has topped VGK, the largest Europe ETF, by 170 basis points. [Smart Beta Europe ETFs are Winning]
Some of that advantage can be tied to FEP’s holdings having a median market value of just under $7.2 billion. FEP market-cap weights include mid-caps 24.8%, large-caps 24.2% and mega-caps 9.1%.
First Trust Europe AlphaDEX Fund
Tom Lydon’s clients own shares of HEDJ.