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Should First Trust Large Cap Core AlphaDEX ETF (FEX) Be on Your Investing Radar?
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The First Trust Large Cap Core AlphaDEX ETF (FEX - Free Report) was launched on 05/08/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.11 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.59%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.15%.
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 to the Financials sector--about 18.40% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, At&t Inc. (T - Free Report) accounts for about 0.58% of total assets, followed by Lkq Corporation (LKQ - Free Report) and Gilead Sciences, Inc. (GILD - Free Report) .
The top 10 holdings account for about 5.26% of total assets under management.
Performance and Risk
FEX seeks to match the performance of the Nasdaq AlphaDEX Large Cap Core Index before fees and expenses. The NASDAQ AlphaDEX Large Cap Core Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 500 Large Cap Index.
The ETF has lost about -9.90% so far this year and is down about -6.47% in the last one year (as of 09/12/2022). In the past 52-week period, it has traded between $74.38 and $92.98.
The ETF has a beta of 1.06 and standard deviation of 25.37% for the trailing three-year period, making it a medium risk choice in the space. With about 376 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Large Cap Core 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, FEX is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $304.27 billion in assets, SPDR S&P 500 ETF has $366.71 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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 First Trust Large Cap Core AlphaDEX ETF (FEX) Be on Your Investing Radar?
The First Trust Large Cap Core AlphaDEX ETF (FEX - Free Report) was launched on 05/08/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.11 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.59%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.15%.
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 to the Financials sector--about 18.40% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, At&t Inc. (T - Free Report) accounts for about 0.58% of total assets, followed by Lkq Corporation (LKQ - Free Report) and Gilead Sciences, Inc. (GILD - Free Report) .
The top 10 holdings account for about 5.26% of total assets under management.
Performance and Risk
FEX seeks to match the performance of the Nasdaq AlphaDEX Large Cap Core Index before fees and expenses. The NASDAQ AlphaDEX Large Cap Core Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 500 Large Cap Index.
The ETF has lost about -9.90% so far this year and is down about -6.47% in the last one year (as of 09/12/2022). In the past 52-week period, it has traded between $74.38 and $92.98.
The ETF has a beta of 1.06 and standard deviation of 25.37% for the trailing three-year period, making it a medium risk choice in the space. With about 376 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Large Cap Core 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, FEX is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $304.27 billion in assets, SPDR S&P 500 ETF has $366.71 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.