Making its debut on 04/18/2011, smart beta exchange traded fund First Trust Japan AlphaDEX ETF (FJP) provides investors broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $245.24 million, making it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. Before fees and expenses, FJP seeks to match the performance of the NASDAQ AlphaDEX Japan Index.
The NASDAQ AlphaDEX Japan Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ Japan Index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.80%, making it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.64%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Mitsui Kinzoku Company, Ltd. (5706.JP) accounts for about 3.01% of the fund's total assets, followed by Ngk Corp. (5333.JP) and Ibiden Co., Ltd. (4062.JP).
FJP's top 10 holdings account for about 20.48% of its total assets under management.
Performance and Risk
The ETF return is roughly 9.79% and is up roughly 30.24% so far this year and in the past one year (as of 07/21/2026), respectively. FJP has traded between $59.05 and $81.97 during this last 52-week period.
The fund has a beta of 0.59 and standard deviation of 20.85% for the trailing three-year period, which makes FJP a medium risk choice in this particular space. With about 102 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Japan AlphaDEX ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Developed) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Japan ETF (BBJP) tracks MORNINGSTAR JAPAN TRGT MRKT EXPOSURE ID and the iShares MSCI Japan ETF (EWJ) tracks MSCI Japan Index. JPMorgan BetaBuilders Japan ETF has $17.13 billion in assets, iShares MSCI Japan ETF has $21.6 billion. BBJP has an expense ratio of 0.19% and EWJ changes 0.49%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Developed) ETFs
Bottom Line
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First Trust Japan AlphaDEX ETF (FJP): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).