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Should You Invest in the First Trust Consumer Staples AlphaDEX ETF (FXG)?
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If you're interested in broad exposure to the Consumer Staples - Broad segment of the equity market, look no further than the First Trust Consumer Staples AlphaDEX ETF (FXG - Free Report) , a passively managed exchange traded fund launched on 05/08/2007.
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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $417.89 million, making it one of the average sized ETFs attempting to match the performance of the Consumer Staples - Broad segment of the equity market. FXG seeks to match the performance of the StrataQuant Consumer Staples Index before fees and expenses.
The StrataQuant Consumer Staples Index is a modified equal-dollar weighted index designed by the AMEX to objectively identify and select stocks from the Russell 1000 Index that may generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.63%, making it the most expensive product in the space.
It has a 12-month trailing dividend yield of 1.40%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector--about 89.80% of the portfolio, followed by Healthcare.
Looking at individual holdings, Pilgrim's Pride Corporation (PPC - Free Report) accounts for about 4.69% of total assets, followed by Molson Coors Beverage Company (TAP - Free Report) and Freshpet, Inc. (FRPT - Free Report) .
The top 10 holdings account for about 39.71% of total assets under management.
Performance and Risk
The ETF has added about 8.46% so far this year and is up about 9.78% in the last one year (as of 08/28/2024). In that past 52-week period, it has traded between $57.04 and $68.49.
The ETF has a beta of 0.65 and standard deviation of 13.57% for the trailing three-year period, making it a medium risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Consumer Staples AlphaDEX ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FXG, then, is not a suitable option for investors seeking exposure to the Consumer Staples ETFs segment of the market. Instead, there are better ETFs in the space to consider.
Vanguard Consumer Staples ETF (VDC - Free Report) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $7.08 billion in assets, Consumer Staples Select Sector SPDR ETF has $17.14 billion. VDC has an expense ratio of 0.10% and XLP charges 0.09%.
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 Staples AlphaDEX ETF (FXG)?
If you're interested in broad exposure to the Consumer Staples - Broad segment of the equity market, look no further than the First Trust Consumer Staples AlphaDEX ETF (FXG - Free Report) , a passively managed exchange traded fund launched on 05/08/2007.
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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $417.89 million, making it one of the average sized ETFs attempting to match the performance of the Consumer Staples - Broad segment of the equity market. FXG seeks to match the performance of the StrataQuant Consumer Staples Index before fees and expenses.
The StrataQuant Consumer Staples Index is a modified equal-dollar weighted index designed by the AMEX to objectively identify and select stocks from the Russell 1000 Index that may generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.63%, making it the most expensive product in the space.
It has a 12-month trailing dividend yield of 1.40%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector--about 89.80% of the portfolio, followed by Healthcare.
Looking at individual holdings, Pilgrim's Pride Corporation (PPC - Free Report) accounts for about 4.69% of total assets, followed by Molson Coors Beverage Company (TAP - Free Report) and Freshpet, Inc. (FRPT - Free Report) .
The top 10 holdings account for about 39.71% of total assets under management.
Performance and Risk
The ETF has added about 8.46% so far this year and is up about 9.78% in the last one year (as of 08/28/2024). In that past 52-week period, it has traded between $57.04 and $68.49.
The ETF has a beta of 0.65 and standard deviation of 13.57% for the trailing three-year period, making it a medium risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Consumer Staples AlphaDEX ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FXG, then, is not a suitable option for investors seeking exposure to the Consumer Staples ETFs segment of the market. Instead, there are better ETFs in the space to consider.
Vanguard Consumer Staples ETF (VDC - Free Report) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $7.08 billion in assets, Consumer Staples Select Sector SPDR ETF has $17.14 billion. VDC has an expense ratio of 0.10% and XLP charges 0.09%.
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.