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Should You Invest in the First Trust Consumer Discretionary AlphaDEX ETF (FXD)?
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If you're interested in broad exposure to the Consumer Discretionary - Broad segment of the equity market, look no further than the First Trust Consumer Discretionary AlphaDEX ETF (FXD - Free Report) , a passively managed exchange traded fund launched on 05/08/2007.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.60 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. FXD seeks to match the performance of the StrataQuant Consumer Discretionary Index before fees and expenses.
The StrataQuant Consumer Discretionary Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.61%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.70%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector--about 82% of the portfolio. Telecom and Industrials round out the top three.
Looking at individual holdings, Toll Brothers, Inc, (TOL - Free Report) accounts for about 1.72% of total assets, followed by D,r, Horton, Inc, (DHI - Free Report) and Costco Wholesale Corporation (COST - Free Report) .
The top 10 holdings account for about 15.87% of total assets under management.
Performance and Risk
So far this year, FXD has lost about -11.07%, and is down about -2.41% in the last one year (as of 02/23/2022). During this past 52-week period, the fund has traded between $55.14 and $65.57.
The ETF has a beta of 1.39 and standard deviation of 30.17% for the trailing three-year period, making it a medium risk choice in the space. With about 122 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Consumer Discretionary AlphaDEX ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FXD is a sufficient option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Consumer Discretionary ETF (VCR - Free Report) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $5.91 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $19.08 billion. VCR has an expense ratio of 0.10% and XLY charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the First Trust Consumer Discretionary AlphaDEX ETF (FXD)?
If you're interested in broad exposure to the Consumer Discretionary - Broad segment of the equity market, look no further than the First Trust Consumer Discretionary AlphaDEX ETF (FXD - Free Report) , a passively managed exchange traded fund launched on 05/08/2007.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.60 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. FXD seeks to match the performance of the StrataQuant Consumer Discretionary Index before fees and expenses.
The StrataQuant Consumer Discretionary Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.61%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.70%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector--about 82% of the portfolio. Telecom and Industrials round out the top three.
Looking at individual holdings, Toll Brothers, Inc, (TOL - Free Report) accounts for about 1.72% of total assets, followed by D,r, Horton, Inc, (DHI - Free Report) and Costco Wholesale Corporation (COST - Free Report) .
The top 10 holdings account for about 15.87% of total assets under management.
Performance and Risk
So far this year, FXD has lost about -11.07%, and is down about -2.41% in the last one year (as of 02/23/2022). During this past 52-week period, the fund has traded between $55.14 and $65.57.
The ETF has a beta of 1.39 and standard deviation of 30.17% for the trailing three-year period, making it a medium risk choice in the space. With about 122 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Consumer Discretionary AlphaDEX ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FXD is a sufficient option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Consumer Discretionary ETF (VCR - Free Report) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $5.91 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $19.08 billion. VCR has an expense ratio of 0.10% and XLY charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.