FT Portfolios Canada Co (First Trust Canada) has launched the first full suite of Toronto Stock Exchange-listed US sector exchange-traded funds.
First Trust Canada will be offering the following nine funds and each of the First Trust ETFs will seek to replicate, to the extent possible, the performance of the applicable StrataQuant sector indexes listed:
First Trust AlphaDEX US Energy Sector ETF (FHE) – StrataQuant Energy Index
First Trust AlphaDEX US Health Care Sector ETF (FHH) – StrataQuant Health Care Index
First Trust AlphaDEX US Industrials Sector ETF (FHG) – StrataQuant Industrials Index
First Trust AlphaDEX US Consumer Staples Sector ETF (FHC) – StrataQuant Consumer Staples Index
First Trust AlphaDEX US Financials Sector ETF (FHF) – StrataQuant Financials Index
First Trust AlphaDEX US Utilities Sector ETF (FHU) – StrataQuant Utilities Index
First Trust AlphaDEX US Consumer Discretionary Sector ETF (FHD) – StrataQuant Consumer Discretionary Index
First Trust AlphaDEX US Materials Sector ETF (FHM) – StrataQuant Materials Index
First Trust AlphaDEX US Technology Sector ETF (FHQ) – StrataQuant Technology Index
Each StrataQuant sector index results from applying the AlphaDEX methodology to the Russell 1000 Index (a market index representing the large capitalization segment of the US equity universe), then selecting the constituent securities for the applicable index from those qualifying stocks included in the applicable sector.
The First Trust AlphaDEX US Sectors follow “enhanced indices” which employ First Trust’s proprietary AlphaDEX stock selection methodology. The AlphaDEX methodology combines the traditional benefits of ETFs: intraday liquidity, generally lower expenses and daily transparency; and the added advantages of the AlphaDEX methodology: the potential to outperform a benchmark and the selection and weighting of stocks based on investment merit.
“Our new US sectors offerings will provide Canadians the opportunity to invest in equity sectors that have been underrepresented in the Canadian market such as healthcare, consumer staples and technology. These Canadian domiciled ETFs provide investors with exposure to the US market without the complications of holding comparable US domiciled ETFs. More specifically, Canadian tax payers holding US domiciled ETFs may be subject to increasingly detailed reporting requirements by the Canadian Revenue Agency as well as potential US estate tax obligations. Our products may offer a way to reduce these complexities,” says Karl Cheong, senior vice president of First Trust Portfolios Canada.