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Is First Trust Industrials/Producer Durables AlphaDEX ETF (FXR) a Strong ETF Right Now?
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Launched on 05/08/2007, the First Trust Industrials/Producer Durables AlphaDEX ETF (FXR - Free Report) is a smart beta exchange traded fund offering broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors, and has been able to amass over $1.86 billion, which makes it one of the larger ETFs in the Industrials ETFs. Before fees and expenses, FXR seeks to match the performance of the StrataQuant Industrials Index.
The StrataQuant Industrials 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.
Cost & Other Expenses
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.60%.
FXR's 12-month trailing dividend yield is 0.69%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
FXR's heaviest allocation is in the Industrials sector, which is about 69.5% of the portfolio. Its Financials and Materials round out the top three.
When you look at individual holdings, Howmet Aerospace Inc. (HWM) accounts for about 1.54% of the fund's total assets, followed by General Electric Company (GE) and Air Lease Corporation (AL).
The top 10 holdings account for about 13.93% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Industrials/Producer Durables AlphaDEX ETF return is roughly 2.96% so far, and was up about 14.23% over the last 12 months (as of 07/04/2025). FXR has traded between $60.85 and $83.27 in this past 52-week period.
The ETF has a beta of 1.14 and standard deviation of 20.49% for the trailing three-year period, making it a medium risk choice in the space. With about 137 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Industrials/Producer Durables AlphaDEX ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $5.79 billion in assets, Industrial Select Sector SPDR ETF has $22.31 billion. VIS has an expense ratio of 0.09% and XLI changes 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs
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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Is First Trust Industrials/Producer Durables AlphaDEX ETF (FXR) a Strong ETF Right Now?
Launched on 05/08/2007, the First Trust Industrials/Producer Durables AlphaDEX ETF (FXR - Free Report) is a smart beta exchange traded fund offering broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors, and has been able to amass over $1.86 billion, which makes it one of the larger ETFs in the Industrials ETFs. Before fees and expenses, FXR seeks to match the performance of the StrataQuant Industrials Index.
The StrataQuant Industrials 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.
Cost & Other Expenses
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.60%.
FXR's 12-month trailing dividend yield is 0.69%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
FXR's heaviest allocation is in the Industrials sector, which is about 69.5% of the portfolio. Its Financials and Materials round out the top three.
When you look at individual holdings, Howmet Aerospace Inc. (HWM) accounts for about 1.54% of the fund's total assets, followed by General Electric Company (GE) and Air Lease Corporation (AL).
The top 10 holdings account for about 13.93% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Industrials/Producer Durables AlphaDEX ETF return is roughly 2.96% so far, and was up about 14.23% over the last 12 months (as of 07/04/2025). FXR has traded between $60.85 and $83.27 in this past 52-week period.
The ETF has a beta of 1.14 and standard deviation of 20.49% for the trailing three-year period, making it a medium risk choice in the space. With about 137 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Industrials/Producer Durables AlphaDEX ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $5.79 billion in assets, Industrial Select Sector SPDR ETF has $22.31 billion. VIS has an expense ratio of 0.09% and XLI changes 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs
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.