First Trust Switzerland AlphaDEX Fund (FSZ) seeks to track the NASDAQ AlphaDEX Switzerland Index, which selects and weights Swiss stocks based on fundamental growth and value factors rather than market capitalization. This equity ETF provides targeted exposure to Swiss companies exhibiting strong earnings growth, sales growth, price momentum, and attractive valuations.
How It Works
FSZ employs First Trust's proprietary AlphaDEX methodology, which screens Swiss stocks using fundamental criteria including return on assets, price-to-book ratio, sales growth, and one-year price appreciation. Selected stocks are equally weighted within growth and value baskets, then combined with 50% allocation to each style. The fund rebalances semi-annually in March and September to maintain factor exposures and equal weighting discipline, typically holding 15-25 Swiss companies.
Key Features
- Factor-based selection methodology targets Swiss stocks with superior growth and value characteristics versus market-cap weighting
- Equal weighting approach reduces concentration risk and provides broader exposure across Swiss mid-cap companies
- Semi-annual rebalancing captures factor momentum while maintaining disciplined exposure to fundamental stock characteristics
Risks
- This ETF can lose value when Swiss franc strengthens against USD, as currency movements directly impact returns for U.S. investors
- Factor strategies may underperform during periods when growth or value styles fall out of favor, potentially lasting multiple years
- Swiss market concentration in pharmaceuticals and financials creates sector-specific risks during industry downturns or regulatory changes
Who Should Own This
Best suited as a satellite holding (5-10% of international allocation) for investors with 3+ year time horizons seeking factor-based exposure to Swiss equities. Medium-to-high risk tolerance required due to single-country concentration and currency volatility. Appeals to tactical investors wanting alternatives to market-cap weighted European or developed market ETFs.