First Trust Developed Markets Ex-US AlphaDEX Fund (FDT) Covered Calls

FDT is an exchange-traded fund that tracks an index of international developed-market stocks. It utilizes a multi-factor "AlphaDEX" methodology to select and weight companies based on growth and value characteristics, such as price appreciation, sales growth, and cash flow. The fund offers exposure to developed economies outside the U.S., including Europe, Japan, and Canada, using a rules-based, non-market-cap-weighted approach.

You can sell covered calls on First Trust Developed Markets Ex-US AlphaDEX Fund to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for FDT (prices last updated Wed 4:16 PM ET):

Want to make money with covered calls?  Sign Up For A Free Trial

The First Trust Developed Markets Ex-US AlphaDEX Fund (FDT) seeks to provide an alternative to traditional market-capitalization-weighted international index funds. Instead of weighting holdings based solely on their market size, FDT uses the proprietary AlphaDEX methodology. This process ranks stocks within the Nasdaq Developed Markets Ex-US Index based on various growth and value factors—including momentum, book-value-to-price, and cash-flow-to-price—to identify companies with the potential for alpha generation.

The portfolio is rebalanced and reconstituted on a semi-annual basis, ensuring that the fund maintains its tilt toward companies that continue to meet the specific growth and value criteria set by the index. By excluding the U.S. and focusing on developed markets in regions like Western Europe, Japan, Australia, and Canada, FDT provides geographic diversification while attempting to outperform standard international benchmarks through its systematic factor-based selection.

Competitive Landscape

FDT operates in the crowded foreign large-cap equity category. It competes with broad, market-cap-weighted international funds such as the iShares MSCI EAFE ETF, which is a standard benchmark for developed international markets. Because FDT uses a factor-based "Smart Beta" approach, it also faces competition from other factor-tilted ETFs, such as the iShares MSCI EAFE Value ETF or iShares MSCI EAFE Growth ETF.

Investors also compare FDT to diversified international funds like Vanguard Total International Stock ETF, which includes emerging markets and typically carries a lower expense ratio. The choice between FDT and these alternatives usually depends on whether an investor prefers a passive, market-cap-weighted strategy or a more active, rules-based methodology designed to target specific factor exposures in international markets.

Strategic Outlook and Investment Usage

FDT is generally intended for long-term investors seeking to augment their international equity exposure with a factor-driven strategy. It is often used as a "satellite" holding within a larger global portfolio to capture growth and value signals that might be underrepresented in a purely market-cap-weighted index. Because the AlphaDEX methodology relies on periodic rebalancing, the fund may experience higher turnover and potentially different tax characteristics than passive index funds.

Strategic investors should be aware that factor-based strategies can experience periods of underperformance relative to the broader market when their specific targeted factors (growth or value) fall out of favor. Despite this, FDT remains a popular vehicle for expressing a systematic view on international markets. With solid liquidity, it serves as a robust tool for investors aiming to combine the benefits of international diversification with a quantitative approach to stock selection.

Want more examples? FDS Covered Calls | FDUS Covered Calls