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AlphaDEX makes a move to Nasdaq

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8 April will see the American exchange Nasdaq complete the listing venue switch of the entire US smart beta family of 12 First Trust AlphaDEX ETFs from NYSE ARCA to Nasdaq. The indexes will also switch from S&P to Nasdaq. 

This will represent the biggest group of switches of all AlphaDEX products they have completed to date, having switched 17 of their products last year. Included in the 12, is their most popular US product with roughly USD1.5 billion in AUM: the First Trust Large Cap Core AlphaDEX Fund (FEX). Total AUM for US and Countries (ex-US) products is approximately USD6.0 billion. Additionally, not only is Nasdaq the index provider for the family of products, but the indexes are also branded as Nasdaq. 
 
A complex switch such as this is something that has been happening with some regularity says Dave Gedeon, (pictured) Head of Research & Development, Nasdaq Global Indexes.
 
“You’ll see a handful every year,” he says. “It’s not the norm, but it’s always a great thing if you are the benchmark to which the ETF is switching.”
 
Gedeon believes that Nasdaq has developed a compelling case for the ETF provider on why their indexes are a better fit for them.
 
“A number of factors go into a decision like this. Part of the conversation is aligning the ETF provider and index provider such that they have a joint belief in the product and use opportunities like this to deepen the relationship.”
 
Gedeon says that the AlphaDEX product lines have had tremendous growth over the last few years. “It’s a testament to First Trust’s capabilities as a firm. These products, are the origins of the new era in smart beta, AlphaDEX combines fundamentals and factor selection and packages it into a single solution,” he says.
 
A switch on this scale keeps the index provider’s R&D team, working with the ETF product, portfolio and sales. “It’s a lot of work and not taken lightly,” Gedeon says.

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