The First Trust Large Cap Core AlphaDEX® Fund is preparing for its scheduled quarterly operational adjustments as the first quarter concludes. This process involves a fundamental shift for investors, moving away from traditional market-cap weighting toward a methodology that emphasizes stocks with strong fundamental metrics.
Quarterly Rebalancing and Dividend Schedule
A key date for shareholders is March 26, which has been set as the ex-dividend date for the fund’s upcoming distribution. Investors holding shares on this record date will receive their payout on March 31. This distribution cycle coincides with the fund’s systematic index rebalancing, a core feature of its strategy.
The ETF employs a multi-stage selection and weighting system. It ranks eligible stocks based on growth and value factors—including price appreciation, sales growth, and return on assets—before segregating them into quintiles. Companies demonstrating the strongest composite scores receive the highest portfolio allocations. This five-tier weighting framework is designed to create a deliberate divergence from the standard composition of the S&P 500.
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A Dynamic, Factor-Driven Methodology
Unlike passive index-tracking products, this smart-beta fund actively reshuffles its holdings each quarter to favor companies exhibiting the most robust current fundamentals. The approach is highly responsive to shifts in underlying financial data, which can lead to significant portfolio turnover between sectors.
Currently, industrial and financial stocks hold dominant positions within the portfolio. Whether the March rebalancing will substantially increase the technology weighting depends entirely on whether that sector, or the consumer cyclical sector, has recently shown higher relative strength compared to the broader market.
Market data indicates the fund’s regular reconstitution cycles and unique weighting approach have made it a consistent component in numerous institutional model portfolios. These portfolios frequently utilize the ETF as a strategic satellite holding to capture relative strength and add factor-based exposure distinct from the broad market.
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