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Should First Trust Large Cap Core AlphaDEX ETF (FEX) Be on Your Investing Radar?
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Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the First Trust Large Cap Core AlphaDEX ETF (FEX - 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 $1.27 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 usually 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 0.58%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.19%.
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 to the Financials sector--about 20% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Robinhood Markets, Inc. (class A) (HOOD - Free Report) accounts for about 0.64% of total assets, followed by Palantir Technologies Inc. (class A) (PLTR - Free Report) and Cloudflare, Inc. (class A) (NET - Free Report) .
The top 10 holdings account for about 5.28% 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 -0.79% so far this year and is up about 8.75% in the last one year (as of 03/05/2025). In the past 52-week period, it has traded between $93.69 and $112.88.
The ETF has a beta of 1.07 and standard deviation of 16.46% for the trailing three-year period, making it a medium risk choice in the space. With about 377 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Large Cap Core AlphaDEX ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FEX is an excellent option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard S&P 500 ETF (VOO - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While Vanguard S&P 500 ETF has $599.62 billion in assets, SPDR S&P 500 ETF has $619.47 billion. VOO has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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?
Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the First Trust Large Cap Core AlphaDEX ETF (FEX - 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 $1.27 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 usually 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 0.58%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.19%.
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 to the Financials sector--about 20% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Robinhood Markets, Inc. (class A) (HOOD - Free Report) accounts for about 0.64% of total assets, followed by Palantir Technologies Inc. (class A) (PLTR - Free Report) and Cloudflare, Inc. (class A) (NET - Free Report) .
The top 10 holdings account for about 5.28% 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 -0.79% so far this year and is up about 8.75% in the last one year (as of 03/05/2025). In the past 52-week period, it has traded between $93.69 and $112.88.
The ETF has a beta of 1.07 and standard deviation of 16.46% for the trailing three-year period, making it a medium risk choice in the space. With about 377 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Large Cap Core AlphaDEX ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FEX is an excellent option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard S&P 500 ETF (VOO - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While Vanguard S&P 500 ETF has $599.62 billion in assets, SPDR S&P 500 ETF has $619.47 billion. VOO has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.