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Is First Trust Japan AlphaDEX ETF (FJP) a Strong ETF Right Now?
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A smart beta exchange traded fund, the First Trust Japan AlphaDEX ETF (FJP - Free Report) debuted on 04/18/2011, and offers broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by First Trust Advisors, FJP has amassed assets over $201.45 million, making it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. FJP seeks to match the performance of the NASDAQ AlphaDEX Japan Index before fees and expenses.
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.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.80%.
FJP's 12-month trailing dividend yield is 3.30%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Kawasaki Kisen Kaisha, Ltd. (9107.JP) accounts for about 2.27% of total assets, followed by Idemitsu Kosan Co., Ltd. (5019.JP) and Nippon Yusen K.k. (9101.JP).
The top 10 holdings account for about 19.21% of total assets under management.
Performance and Risk
The ETF has added roughly 5.70% and it's up approximately 21.47% so far this year and in the past one year (as of 03/05/2024), respectively. FJP has traded between $42.81 and $54.01 during this last 52-week period.
The fund has a beta of 0.65 and standard deviation of 18.49% for the trailing three-year period, which makes FJP a medium risk choice in this particular 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 $11.27 billion in assets, iShares MSCI Japan ETF has $16.56 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?
A smart beta exchange traded fund, the First Trust Japan AlphaDEX ETF (FJP - Free Report) debuted on 04/18/2011, and offers broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by First Trust Advisors, FJP has amassed assets over $201.45 million, making it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. FJP seeks to match the performance of the NASDAQ AlphaDEX Japan Index before fees and expenses.
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.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.80%.
FJP's 12-month trailing dividend yield is 3.30%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Kawasaki Kisen Kaisha, Ltd. (9107.JP) accounts for about 2.27% of total assets, followed by Idemitsu Kosan Co., Ltd. (5019.JP) and Nippon Yusen K.k. (9101.JP).
The top 10 holdings account for about 19.21% of total assets under management.
Performance and Risk
The ETF has added roughly 5.70% and it's up approximately 21.47% so far this year and in the past one year (as of 03/05/2024), respectively. FJP has traded between $42.81 and $54.01 during this last 52-week period.
The fund has a beta of 0.65 and standard deviation of 18.49% for the trailing three-year period, which makes FJP a medium risk choice in this particular 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 $11.27 billion in assets, iShares MSCI Japan ETF has $16.56 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.