First Trust Multi Cap Value AlphaDEX Fund

First Trust Multi Cap Value AlphaDEX Fund (FAB) is an ETF that tracks the Nasdaq AlphaDEX Multi Cap Value Index. That index is a rules-based mix of about 675 value-leaning US stocks, split 50% large, 30% mid-size and 20% small companies. Plain value index funds weight stocks by size, but FAB scores and reweights its stocks every quarter. It also costs more: a 0.66% expense ratio, against a 0.35% average for similar funds.

• Over the year to Oct 27, 2026, FAB returned +22.2%, 4th of 9 among similar funds.
• Its 5-year annualized return was +9.7% and its 10-year +10.8%.
• In the 2020 COVID crash it fell 45.7% and regained its old high 8 months after the low.
• Its worst full calendar year was 2008 (-36.1%); its best was 2009 (+48.4%).
• The deepest fall in its price history was 63.3% (Jun 4, 2007 to Mar 6, 2009), recovered by Jan 12, 2011.

As of Jul 31, 2026, the fund held 675 securities; the ten largest made up 5.33% of assets.

• Over the three months to Jul 31, 2026, investors added a net $21.0M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -0.57%, +3.31%, +3.75%.

FAB invests at least 90% of its net assets in the stocks of an index that Nasdaq owns and maintains. The index starts with three Nasdaq value indexes covering large, mid-size and small US companies. It removes duplicate share classes and stocks that trade too thinly. Then it ranks each remaining stock on value and growth measures within its size group. This method, called AlphaDEX, tries to pick stocks that may beat traditional indexes on a risk-adjusted basis.

The top 187 large, 225 mid-size and 262 small companies make the cut. Within each size group, the stocks are split into fifths by score, and higher-scoring fifths get more weight. The weights are then scaled so large companies make up 50% of the index, mid-size 30% and small 20%. This spreads the money very thin. As of July 31, 2026, the 10 largest holdings made up just 5.33% of the fund. The biggest single stock, Cognizant Technology Solutions, was about 0.6%.

The index is rebuilt and rebalanced every quarter, and the fund follows soon after. That helps explain its 86% portfolio turnover, a measure of how much of the portfolio is traded in a year. The fund leans toward whatever industries the index favors. As of October 31, 2025, it had significant investments in financial companies. It held no derivatives as of July 31, 2026.

• FAB charges 0.66% a year, versus an average of 0.35% for the similar funds below (9th of 9, cheapest first).
• Of that, 0.5% is the management fee; the rest covers other fund expenses.

FAB is a quant-driven value fund with high turnover, a high fee and deep past drops, so it fits better as a tilt alongside a broad core than as the core itself.

FAB could add a tilt toward value stocks and smaller companies next to a broad market fund. It has fallen hard in downturns. In the 2008 financial crisis it dropped 60.6% and didn't recover until November 2010. Its deepest drop, 63.3%, took until January 2011 to make up. It fell 45.7% in the 2020 COVID crash and took 8 months to recover. In the 2022 bear market it fell 20.6% and recovered in 4 months. Its worst calendar year was 2008, when it lost 36.1%. Someone who had to sell shares in years like those would lock in steep losses. The fund yielded 1.68% over the 12 months to October 27, 2026, paid quarterly, so income is not its main purpose. Its 0.66% expense ratio is the highest of the nine funds in its comparison group. Past results don't predict future returns, and a retirement plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.