First Trust Multi Cap Value AlphaDEX Fund (FAB) Covered Calls

First Trust Multi Cap Value AlphaDEX Fund is an exchange-traded fund that seeks to provide investment results that correspond generally to the price and yield of the Nasdaq AlphaDEX Multi Cap Value Index. The fund utilizes a quantitative selection methodology to identify value stocks across all market capitalizations with the greatest potential for capital appreciation. By ranking equities based on fundamental factors, the fund offers a tactical take on value investing.

You can sell covered calls on First Trust Multi Cap Value AlphaDEX Fund to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for FAB (prices last updated Fri 4:16 PM ET):

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The First Trust Multi Cap Value AlphaDEX Fund (FAB) is an "enhanced" index ETF that aims to generate positive alpha relative to traditional market-cap-weighted indices. The fund tracks the Nasdaq AlphaDEX Multi Cap Value Index, which selects securities from a broad universe including large, mid, and small-cap U.S. stocks. Unlike passive funds that simply buy the largest companies, FAB uses a rules-based engine to identify stocks with the most compelling value characteristics and growth potential.

Core Business and Products

The fund's primary "products" are its diversified holdings in approximately 675 U.S. equities. The AlphaDEX methodology ranks eligible stocks based on value factors—such as book value to price, cash flow to price, and return on assets—to identify those that may be undervalued by the market. The portfolio is heavily weighted toward cyclical and defensive sectors that traditionally harbor value opportunities, such as financials, energy, and industrials. Key holdings often include blue-chip names like Exxon Mobil and Verizon, as well as mid-cap leaders across various industrial niches.

Competitive Landscape

The value ETF space is highly competitive, with FAB distinguishing itself through its multi-cap approach and "smart beta" selection process. It competes with both broad market trackers and style-specific funds. Key optionable competitors include:

1. iShares Russell 1000 Value ETF: A major competitor focusing on large-cap value stocks with a passive weighting structure.
2. Vanguard Value ETF: One of the largest and lowest-cost funds tracking a broad index of U.S. value equities.
3. iShares Russell 3000 ETF: A broad-market competitor that represents the total U.S. equity universe, which FAB seeks to outperform.

Strategic Outlook and Innovation

The strategic focus of the fund is to provide a disciplined alternative to traditional indexing that can better navigate shifting economic cycles. Management focuses on maintaining a transparent and repeatable investment process, ensuring that the quarterly rebalancing captures new value opportunities as they emerge in the market. As interest rate environments and inflation expectations fluctuate, the fund's emphasis on fundamental value and tangible assets often provides a different performance profile compared to growth-heavy benchmarks.

Innovation within the fund involves the constant refinement of the AlphaDEX quantitative model to ensure the factors used remain relevant in a data-driven market. By integrating sophisticated risk-management techniques, the fund seeks to provide the upside potential of active management with the low costs and liquidity associated with the ETF structure. This evergreen strategy is designed to identify "true" value across the entire market-cap spectrum, making it a versatile tool for investors looking to balance their portfolios against pure growth or large-cap-only exposures.

Want more examples? FA Covered Calls | FAD Covered Calls