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Should First Trust Large Cap Growth AlphaDEX ETF (FTC) Be on Your Investing Radar?
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Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the First Trust Large Cap Growth AlphaDEX ETF (FTC - Free Report) , a passively managed exchange traded fund launched on 05/08/2007.
The fund is sponsored by First Trust Advisors. It has amassed assets over $986.54 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 Information Technology sector--about 26.60% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Royal Caribbean Cruises Ltd. (RCL - Free Report) accounts for about 1.33% of total assets, followed by Delta Air Lines, Inc. (DAL - Free Report) and Uber Technologies, Inc. (UBER - Free Report) .
The top 10 holdings account for about 10.69% of total assets under management.
Performance and Risk
FTC seeks to match the performance of the Nasdaq AlphaDEX Large Cap Growth Index before fees and expenses. The NASDAQ AlphaDEX Large Cap Growth Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 500 Large Cap Growth Index.
The ETF has gained about 6.23% so far this year and is up roughly 9.98% in the last one year (as of 09/25/2023). In the past 52-week period, it has traded between $85.55 and $104.25.
The ETF has a beta of 1.05 and standard deviation of 21.22% for the trailing three-year period, making it a medium risk choice in the space. With about 188 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Large Cap Growth 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, FTC is a reasonable option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $88.87 billion in assets, Invesco QQQ has $197.71 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 Growth AlphaDEX ETF (FTC) Be on Your Investing Radar?
Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the First Trust Large Cap Growth AlphaDEX ETF (FTC - Free Report) , a passively managed exchange traded fund launched on 05/08/2007.
The fund is sponsored by First Trust Advisors. It has amassed assets over $986.54 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 Information Technology sector--about 26.60% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Royal Caribbean Cruises Ltd. (RCL - Free Report) accounts for about 1.33% of total assets, followed by Delta Air Lines, Inc. (DAL - Free Report) and Uber Technologies, Inc. (UBER - Free Report) .
The top 10 holdings account for about 10.69% of total assets under management.
Performance and Risk
FTC seeks to match the performance of the Nasdaq AlphaDEX Large Cap Growth Index before fees and expenses. The NASDAQ AlphaDEX Large Cap Growth Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 500 Large Cap Growth Index.
The ETF has gained about 6.23% so far this year and is up roughly 9.98% in the last one year (as of 09/25/2023). In the past 52-week period, it has traded between $85.55 and $104.25.
The ETF has a beta of 1.05 and standard deviation of 21.22% for the trailing three-year period, making it a medium risk choice in the space. With about 188 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Large Cap Growth 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, FTC is a reasonable option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $88.87 billion in assets, Invesco QQQ has $197.71 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.