The Nasdaq AlphaDEX® Indexes
Designed to objectively identify stocks that exhibit growth factors with the greatest potential for capital appreciation
exploreThe Nasdaq AlphaDEX® Indexes use a proprietary, rules-based methodology designed to produce similar correlation and risk characteristics as broad market indexes while seeking outperformance. By utilizing various stock selections and weighting criteria based on growth and value factors, the Indexes offer unique smart beta characteristics for investors.
The Nasdaq AlphaDEX family currently consists of Eurozone, U.S. Total Market, Emerging Market Small Cap and Developed Market Ex-U.S. Small Cap Indexes.
RELATED INDEXES:
- Nasdaq AlphaDEX Asia Pac Ex-Japan Index
- Nasdaq AlphaDEX Japan Index
- Nasdaq AlphaDEX Eurozone Index
- Nasdaq AlphaDEX DM Ex-US Small Cap Index
AlphaDEX Methodology
Since launched by First Trust Portfolios in 2007, the AlphaDEX methodology and the products that track it have gathered continuous investor interest due to its strategic approach to enhanced passive index investing.
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Growth & Value
Based on style designations, determine each stock's selection score. Stocks designated as core or blend receive the better of their growth or value score.
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Score
Based on style designations, determine each stock's selection score. Stocks designated as core or blend receive the better of their growth or value score.
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Elimination
Rank all stocks by their final selection score and eliminate from consideration the lowest 25 %.
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Rank
Place the remaining stocks into quintiles based on their selection score rank. The top quintile stocks get a total weight of 5/15ths, the second quintile stocks get a total weight of 1/15ths, etc. Each stock is equally weighted within its quintile.
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Evaluate
Repeat the process quarterly, rebalancing and reconstituting the index.
Key Benefits
Strict Methodology
In order to stay true to the mandate of each category to which the AlphaDEX methodology is applied, and to avoid style-drift, the universe from which potential holdings are selected is established from well-known benchmark indices.
Value Model
The AlphaDEX “value” model scores stocks on three separate factors: price-to-book ratio, price-to-cash flow ratio, and return on assets
Growth Model
The AlphaDEX growth model scores stocks based on five separate factors: three-month price appreciation, six-month price appreciation, twelve-month price appreciation, one-year sales growth, and price-to-sales ratio.
View Other Families
Resource Center
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Ebook: Guide to Smart Beta Strategies
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Subscribe to this Index Series
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Index Recalculation Policy Download Index Recalculation Policy