First Trust Brazil AlphaDEX Fund to liquidate in July

First Trust Advisors L.P. will liquidate the First Trust Brazil AlphaDEX Fund (NASDAQ:FBZ) on or around July 18, 2025, following a recommendation from FTA and approval from the Board of Trustees; the fund, which has a market capitalization of $6.95 million and a 1.8% dividend yield, will cease trading on July 11, 2025, with shareholders receiving cash redemption equal to net asset value after obligations are settled.

Analysis

The First Trust Brazil AlphaDEX Fund (NASDAQ:FBZ) is scheduled for liquidation on or around July 18, 2025, following a recommendation by its investment advisor, First Trust Advisors L.P. (FTA), which deemed the action in the best interests of the fund. Despite a significant year-to-date appreciation of 28.75%, bringing its price to $11.59, and offering a 1.8% dividend yield, the fund's relatively small market capitalization of $6.95 million appears to be a critical factor in this decision. Shareholders have until the close of trading on July 11, 2025, to sell their shares through standard brokerage transactions; thereafter, the fund will cease accepting creation and redemption orders and will be de-listed. Investors holding shares on the liquidation date will receive a cash distribution equivalent to the net asset value per share after all fund obligations are settled, an event that will generally trigger a capital gain or loss for tax purposes. FTA, a substantial advisor with approximately $255 billion in assets under management or supervision as of April 30, 2025, is orchestrating this liquidation. The per-ticker sentiment for FBZ is notably negative (-0.8), reflecting the fund's impending closure, while the overall market impact is considered low (0.25), consistent with the fund's small size.

Key Decisions for Investors

• Shareholders of FBZ should evaluate selling their positions before the trading deadline of July 11, 2025, to manage their exit timing and cost, or prepare for automatic cash redemption based on the net asset value post-liquidation.
• Investors must consider the tax implications, as the redemption of FBZ shares will likely result in a taxable capital gain or loss.
• Given the fund's impending closure despite strong recent performance (28.75% YTD), investors seeking continued exposure to Brazilian equities will need to identify alternative investment vehicles.
• The liquidation of FBZ, with its $6.95 million market capitalization, serves as a reminder to assess the viability and potential for liquidation of smaller, niche exchange-traded funds, even those exhibiting positive returns.