First Trust Europe AlphaDEX Fund (FEP) Covered Calls

The First Trust Europe AlphaDEX Fund is an exchange-traded fund that tracks the NASDAQ AlphaDEX Europe Index. The fund employs a proprietary, rules-based selection methodology designed to identify European stocks with the greatest potential for capital appreciation. By ranking companies based on growth and value factors rather than market capitalization, the fund seeks to generate positive alpha and provide a strategic alternative to traditional passive European equity benchmarks.

You can sell covered calls on First Trust Europe 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 FEP (prices last updated Tue 4:16 PM ET):

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Core Business and Products

The First Trust Europe AlphaDEX Fund (FEP) provides investors with exposure to developed European equity markets through an enhanced indexing strategy. Unlike traditional funds that weight companies by their market size, FEP utilizes the AlphaDEX selection methodology. This process ranks stocks from the broader NASDAQ Europe Index based on specific fundamental factors, including price appreciation, sales growth, and various valuation ratios like book value to price.

The resulting portfolio is diversified across numerous European nations and sectors, with significant weightings in financials, industrials, and materials. The fund typically holds over 200 stocks, ensuring that no single company dominates the performance. This structure allows investors to capture the economic growth of the European region while benefiting from a quantitative tilt toward stocks that exhibit strong momentum and attractive fundamental characteristics.

Competitive Landscape

FEP operates in a segment crowded with broad-market European trackers. Its most prominent competitors are market-capitalization-weighted funds such as the Vanguard FTSE Europe ETF and the iShares Europe ETF. While these competitors offer lower expense ratios, FEP differentiates itself through its potential for outperformance by avoiding the "valuation blind spot" often found in cap-weighted indices.

The fund also competes with more concentrated regional plays, such as the SPDR EURO STOXX 50 ETF, which focuses exclusively on the largest blue-chip companies in the Eurozone. Because FEP is optionable, it is frequently used by traders to implement tactical views on European economic recovery or to hedge international equity exposure. The inclusion of non-Eurozone markets like the United Kingdom and Switzerland provides a broader competitive profile compared to funds restricted to the single-currency bloc.

Strategic Outlook and Innovation

The strategy behind the fund is rooted in the belief that fundamental indexing can consistently identify market inefficiencies. By rotating the portfolio quarterly, the fund stays aligned with the most current growth and value signals in the European market. This systematic rebalancing acts as a built-in "buy low, sell high" mechanism, as it trims positions in stocks that have become overvalued and increases weight in those with improving fundamental profiles.

Looking forward, the fund is positioned to benefit from the ongoing digital and industrial transformation within the European economy. Innovation in the portfolio is driven by the selection of companies at the forefront of automation, renewable energy infrastructure, and advanced manufacturing. As a transparent, rules-based vehicle, the fund offers a middle ground between purely passive indexing and high-cost active management, aiming to provide resilient, long-term capital appreciation across various global economic cycles.

Want more examples? FENY Covered Calls | FEPI Covered Calls