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Should You Invest in the First Trust Health Care AlphaDEX ETF (FXH)?
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Designed to provide broad exposure to the Healthcare - Broad segment of the equity market, the First Trust Health Care AlphaDEX ETF (FXH - Free Report) is 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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.56 billion, making it one of the larger ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. FXH seeks to match the performance of the StrataQuant Health Care Index before fees and expenses.
The StrataQuant Health Care Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
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 0.61%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.25%.
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 Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Catalent, Inc. (CTLT - Free Report) accounts for about 2.33% of total assets, followed by Hca Healthcare, Inc. (HCA - Free Report) and Insulet Corporation (PODD - Free Report) .
The top 10 holdings account for about 21.60% of total assets under management.
Performance and Risk
The ETF has lost about -1.43% so far this year and is up about 4.68% in the last one year (as of 05/10/2023). In that past 52-week period, it has traded between $96.46 and $114.21.
The ETF has a beta of 0.80 and standard deviation of 18.59% for the trailing three-year period, making it a medium risk choice in the space. With about 84 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Health Care 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, FXH is a good option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Health Care ETF (VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $17.15 billion in assets, Health Care Select Sector SPDR ETF has $40.15 billion. VHT has an expense ratio of 0.10% and XLV 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 Health Care AlphaDEX ETF (FXH)?
Designed to provide broad exposure to the Healthcare - Broad segment of the equity market, the First Trust Health Care AlphaDEX ETF (FXH - Free Report) is 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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.56 billion, making it one of the larger ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. FXH seeks to match the performance of the StrataQuant Health Care Index before fees and expenses.
The StrataQuant Health Care Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
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 0.61%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.25%.
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 Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Catalent, Inc. (CTLT - Free Report) accounts for about 2.33% of total assets, followed by Hca Healthcare, Inc. (HCA - Free Report) and Insulet Corporation (PODD - Free Report) .
The top 10 holdings account for about 21.60% of total assets under management.
Performance and Risk
The ETF has lost about -1.43% so far this year and is up about 4.68% in the last one year (as of 05/10/2023). In that past 52-week period, it has traded between $96.46 and $114.21.
The ETF has a beta of 0.80 and standard deviation of 18.59% for the trailing three-year period, making it a medium risk choice in the space. With about 84 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Health Care 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, FXH is a good option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Health Care ETF (VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $17.15 billion in assets, Health Care Select Sector SPDR ETF has $40.15 billion. VHT has an expense ratio of 0.10% and XLV 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.