First Trust Large Cap Core AlphaDEX Fund (FEX) Covered Calls

The First Trust Large Cap Core AlphaDEX Fund (FEX) is an exchange-traded fund that tracks the NASDAQ AlphaDEX Large Cap Core Index. It uses a quantitative stock-selection methodology to identify large-cap U.S. companies based on growth and value factors, aiming to outperform traditional market-cap-weighted indices. The fund provides diversified exposure across hundreds of U.S. large-cap stocks, functioning as a smart-beta core equity holding.

You can sell covered calls on First Trust Large Cap Core 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 FEX (prices last updated Tue 4:16 PM ET):

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Core Business and Products

The First Trust Large Cap Core AlphaDEX Fund (FEX) employs a rules-based, quantitative approach to equity investing. Instead of weighting holdings solely by market capitalization, the AlphaDEX methodology screens the NASDAQ US 500 Large Cap Index to select stocks based on fundamental metrics, including price appreciation, sales growth, and earnings growth, while simultaneously filtering for value. This results in a portfolio that tilts toward companies deemed to have superior risk-adjusted return potential.

The fund is structured as a diversified, passively managed equity ETF, offering a way to access large-cap U.S. companies with an enhanced weighting strategy. It maintains broad sector representation, with typical concentrations in industries like industrials, financials, and information technology. It is designed for investors seeking a systematic alternative to traditional passive indices.

Competitive Landscape

FEX competes in the crowded large-cap blend category against major, low-cost, market-cap-weighted ETFs. While these traditional giants capture the broad market, FEX differentiates itself by offering an active-like "smart beta" strategy within an ETF wrapper. It faces competition from other factor-based products, though many are specialized in distinct factors like momentum or quality.

Because FEX operates as a quantitative index fund, it generally does not compete with highly liquid, optionable sector-specific instruments. Its performance is driven by the broader market environment rather than tactical short-term speculation. While it holds individual stocks that have active options markets, the fund itself is not typically used for options-based income strategies.

Strategic Outlook and Innovation

The strategic outlook for FEX is rooted in the long-term effectiveness of factor-based investing. By consistently applying the same quantitative screens regardless of market cycle, the fund aims to provide performance that differs from standard indices. This stability is intended to benefit investors who want a disciplined, rules-based approach to equity ownership that does not rely on human emotional decision-making.

Innovation in this space is driven by the refinement of quantitative screening criteria and the integration of more robust fundamental data. First Trust continues to optimize its AlphaDEX methodology to ensure that the selection process remains aligned with the evolving dynamics of the U.S. large-cap market, providing a transparent and systematic alternative to active management.

Want more examples? FETH Covered Calls | FEZ Covered Calls