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Is First Trust Japan AlphaDEX ETF (FJP) a Strong ETF Right Now?
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The First Trust Japan AlphaDEX ETF (FJP - Free Report) was launched on 04/18/2011, and is a smart beta exchange traded fund designed to offer broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FJP has been able to amass assets over $233.12 million, making it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. This particular fund, before fees and expenses, seeks to match the performance of the NASDAQ AlphaDEX Japan Index.
The NASDAQ AlphaDEX Japan Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ Japan Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.80%, making it one of the most expensive products in the space.
FJP's 12-month trailing dividend yield is 1.62%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Nippon Steel Corporation (5401.JP) accounts for about 2.11% of the fund's total assets, followed by Toppan, Inc. (7911.JP) and Kawasaki Kisen Kaisha, Ltd. (9107.JP).
The top 10 holdings account for about 18.42% of total assets under management.
Performance and Risk
The ETF has added about 17.96% and it's up approximately 25.34% so far this year and in the past one year (as of 07/19/2023), respectively. FJP has traded between $37.29 and $49.45 during this last 52-week period.
FJP has a beta of 0.68 and standard deviation of 18.53% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Japan AlphaDEX ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Developed) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Japan ETF (BBJP - Free Report) tracks MORNINGSTAR JAPAN TRGT MRKT EXPOSURE ID and the iShares MSCI Japan ETF (EWJ - Free Report) tracks MSCI Japan Index. JPMorgan BetaBuilders Japan ETF has $8.95 billion in assets, iShares MSCI Japan ETF has $13.36 billion. BBJP has an expense ratio of 0.19% and EWJ charges 0.50%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Developed) ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is First Trust Japan AlphaDEX ETF (FJP) a Strong ETF Right Now?
The First Trust Japan AlphaDEX ETF (FJP - Free Report) was launched on 04/18/2011, and is a smart beta exchange traded fund designed to offer broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FJP has been able to amass assets over $233.12 million, making it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. This particular fund, before fees and expenses, seeks to match the performance of the NASDAQ AlphaDEX Japan Index.
The NASDAQ AlphaDEX Japan Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ Japan Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.80%, making it one of the most expensive products in the space.
FJP's 12-month trailing dividend yield is 1.62%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Nippon Steel Corporation (5401.JP) accounts for about 2.11% of the fund's total assets, followed by Toppan, Inc. (7911.JP) and Kawasaki Kisen Kaisha, Ltd. (9107.JP).
The top 10 holdings account for about 18.42% of total assets under management.
Performance and Risk
The ETF has added about 17.96% and it's up approximately 25.34% so far this year and in the past one year (as of 07/19/2023), respectively. FJP has traded between $37.29 and $49.45 during this last 52-week period.
FJP has a beta of 0.68 and standard deviation of 18.53% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Japan AlphaDEX ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Developed) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Japan ETF (BBJP - Free Report) tracks MORNINGSTAR JAPAN TRGT MRKT EXPOSURE ID and the iShares MSCI Japan ETF (EWJ - Free Report) tracks MSCI Japan Index. JPMorgan BetaBuilders Japan ETF has $8.95 billion in assets, iShares MSCI Japan ETF has $13.36 billion. BBJP has an expense ratio of 0.19% and EWJ charges 0.50%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Developed) ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.