First Trust China AlphaDEX Fund (FCA) Covered Calls

First Trust China 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 China Index. The fund utilizes a quantitative selection methodology to identify Chinese equities with high potential for capital appreciation. By ranking stocks based on both growth and value factors, the fund provides a tactical approach to investing in one of the world's largest economies.

You can sell covered calls on First Trust China 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 FCA (prices last updated Tue 4:16 PM ET):

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The First Trust China AlphaDEX Fund (FCA) is an "enhanced" index ETF designed to outperform traditional market-capitalization-weighted benchmarks by using a rules-based selection process. The fund tracks the Nasdaq AlphaDEX China Index, which employs a proprietary multi-factor model to select and weight securities. This "smart beta" approach aims to identify companies within the Chinese market that exhibit the strongest fundamental characteristics rather than simply being the largest in size.

Core Business and Products

The fund's primary "products" are its diversified holdings in Chinese companies across various sectors, including technology, financials, and consumer discretionary. The AlphaDEX methodology ranks eligible securities based on growth factors—such as price appreciation and sales growth—and value factors like book value to price and cash flow to price. The top-ranked stocks are then selected for the portfolio, which is typically rebalanced quarterly. This process allows the fund to pivot toward companies showing the most robust momentum and financial health within the volatile Chinese equity landscape.

Competitive Landscape

Investors looking for exposure to China have several options, ranging from broad-based passive trackers to specialized tech-heavy funds. FCA competes by offering a middle ground that seeks alpha through quantitative analysis. Key optionable competitors include:

1. iShares China Large-Cap ETF: The most popular passive tracker of the 50 largest Chinese companies listed in Hong Kong.
2. iShares MSCI China ETF: A broad-based fund that includes a wider range of large and mid-cap Chinese stocks.
3. SPDR S&P China ETF: Offers exposure to a comprehensive index of Chinese equities across various share classes.
4. KraneShares CSI China Internet ETF: A specialized competitor focused exclusively on the Chinese technology and e-commerce sectors.

Strategic Outlook and Innovation

The strategic focus of the fund is to provide a disciplined, emotion-free investment strategy for a market that is often driven by sentiment and geopolitical headlines. Management continuously monitors the effectiveness of the AlphaDEX factors, ensuring the selection process captures the unique dynamics of the Chinese corporate landscape. As China continues to transition toward a consumer-led economy, the fund's multi-factor model is designed to naturally rotate into the sectors and companies best positioned to benefit from this structural shift.

Innovation within the fund involves leveraging advanced data analytics to refine the growth and value rankings, especially as corporate transparency and reporting standards in China continue to evolve. By maintaining a transparent and repeatable investment process, the fund aims to deliver long-term capital appreciation while providing the liquidity of an ETF. This evergreen strategy is built to adapt to various market cycles, identifying which Chinese companies are currently exhibiting the best combination of fundamental value and market momentum.

Want more examples? FC Covered Calls | FCBC Covered Calls