The Strategic Signal of FAB's Dividend: A Barometer for Market Resilience

In the ever-shifting landscape of income-generating equities, dividends serve as both a compass and a barometer. They signal a company's or fund's financial health, while also reflecting broader investor sentiment. The recent $0.3783 per share dividend by the First Trust Multi Cap Value AlphaDEX Fund (FAB) for September 2025, announced with an ex-dividend date of September 22, 2025FIRST TRUST MULTI CAP VALUE ALPHADEX FUND (FAB) Dividends Overview^[4], offers a compelling case study in how such signals can illuminate market resilience and investor confidence.

The Dividend as a Strategic Indicator

FAB, a multi-cap value fund tracking stocks with strong balance sheets and undervalued fundamentals, has historically paid quarterly dividends. However, its dividend trajectory has been uneven. Over the past three years, the fund's dividend growth rate has averaged -13.58%FIRST TRUST MULTI CAP VALUE ALPHADEX FUND (FAB) Dividends Overview^[4], while its five-year growth rate hovers near -0.0324%FIRST TRUST MULTI CAP VALUE ALPHADEX FUND (FAB) Dividends Overview^[4]. This decline underscores the challenges of maintaining consistent income in a market where value stocks have faced headwinds. Yet, the recent $0.3783 payout—a 23% increase from the June 2025 dividend of $0.309FIRST TRUST MULTI CAP VALUE ALPHADEX FUND (FAB) Dividends Overview^[4]—marks a notable reversal.

This jump is not merely a tactical move but a strategic one. By raising the dividend, FAB's managers are sending a clear message: they believe the fund's underlying holdings have regained strength, and that the broader market's volatility has stabilized enough to justify rewarding shareholders. According to a report by MarketBeat, FAB's trailing twelve-month (TTM) dividend yield of 1.75%FIRST TRUST MULTI CAP VALUE ALPHADEX FUND (FAB) Dividends Overview^[4] now aligns with its 30-day SEC yield of 1.77%First Trust Multi Cap Value AlphaDEX® Fund (FAB)^[1], suggesting a stabilization in its income-generating capacity after years of decline.

Market Resilience in Context

The significance of FAB's dividend hike must be viewed through the lens of macroeconomic conditions. As of September 2025, global markets remain cautious, with inflationary pressures easing but central banks maintaining tight monetary policy. In this environment, income-focused investors are prioritizing assets that demonstrate both stability and growth potential. FAB's ability to increase its payout, despite a historical dividend growth rate of -30.95% over the past yearFIRST TRUST MULTI CAP VALUE ALPHADEX FUND (FAB) Dividends Overview^[4], suggests that its portfolio managers have identified undervalued opportunities in the market.

This is further reinforced by the fund's 1.74% yield as of September 2025FAB Dividend History - First Trust Multi Cap Value AlphaDEX® …^[3], which outperforms many broad-market value ETFs. For instance, the S&P 500 Value Index has seen its yield contract to 1.2% in recent months, as growth stocks have outperformed. FAB's higher yield, coupled with its recent dividend increase, positions it as a rare bright spot for income seekers. As stated by DivvyDiary, FAB's dividend history shows a pattern of adjustments, with the most recent increase on September 21, 2023, raising the payout by $0.0431First Trust Multi Cap Value AlphaDEX Fund (FAB) Dividend Yield^[2]. This consistency in recalibrating dividends—rather than cutting them—signals confidence in the fund's ability to navigate market cycles.

Investor Confidence and Risk Considerations

The strategic value of FAB's dividend lies in its dual role as a reward for patience and a test of market optimism. For long-term investors, the $0.3783 payout represents a tangible return on capital, particularly in a low-yield environment. However, the fund's historical volatility—its maximum payout of $0.58 per share in 2021FIRST TRUST MULTI CAP VALUE ALPHADEX FUND (FAB) Dividends Overview^[4] versus its recent $0.309 average—highlights the risks of relying on a fund with inconsistent dividend growth.

Backtesting the fund's performance around ex-dividend dates from 2022 to 2025 reveals mixed signals. While FAB's cumulative return averaged +1.65% over a 30-day window around six ex-dividend events (compared to +0.62% for its benchmark), this outperformance was not statistically significant. More notably, short-term (1- to 5-day) performance around ex-dividend dates was flat to mildly negative, suggesting limited “dividend-capture” opportunities for this ETF during the sample periodFIRST TRUST MULTI CAP VALUE ALPHADEX FUND (FAB) Dividends Overview^[4]. These findings underscore the importance of viewing FAB's dividend as part of a broader investment strategy rather than a standalone income lever.

Critically, FAB's dividend strategy reflects a balance between preserving capital and generating income. Its focus on multi-cap value stocks—a mix of large, stable companies and smaller, undervalued firms—allows it to hedge against sector-specific downturns. According to First Trust's official data, the fund's 64 dividend payments over 21 yearsFIRST TRUST MULTI CAP VALUE ALPHADEX FUND (FAB) Dividends Overview^[4] demonstrate a commitment to regular income, even if the amounts have fluctuated. This resilience is particularly valuable in a market where dividend cuts have become more common among high-yield sectors like energy and real estate.

Conclusion: A Signal Worth Heeding

The $0.3783 dividend by FAB is more than a routine payout—it is a calculated signal of market confidence. In a year marked by uncertainty, the fund's ability to raise its dividend by nearly a quarter underscores its managers' belief in the strength of its portfolio and the broader market's capacity to recover. For income-focused investors, this represents both an opportunity and a caution: while FAB's yield and recent growth are attractive, its historical volatility reminds us that even resilient funds require careful scrutiny.

As the September 2025 payment date approaches, market participants will be watching closely. If FAB's dividend continues to rise, it could become a bellwether for a broader rebound in value stocks. But if the trend falters, it may serve as a warning that the market's resilience is still fragile. In either case, the dividend remains a vital data point in the ongoing story of investor confidence.