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Is First Trust Materials AlphaDEX ETF (FXZ) a Strong ETF Right Now?
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Launched on 05/08/2007, the First Trust Materials AlphaDEX ETF (FXZ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Materials ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FXZ has been able to amass assets over $216.46 million, making it one of the average sized ETFs in the Materials ETFs. FXZ seeks to match the performance of the StrataQuant Materials Index before fees and expenses.
The StrataQuant Materials 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.61% for this ETF, which makes it on par with most peer products in the space.
FXZ's 12-month trailing dividend yield is 1.77%.
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.
FXZ's heaviest allocation is in the Materials sector, which is about 83.7% of the portfolio. Its Industrials and Energy round out the top three.
Looking at individual holdings, Anglogold Ashanti Plc (AU) accounts for about 6.13% of total assets, followed by Newmont Corporation (NEM) and Mueller Industries, Inc. (MLI).
FXZ's top 10 holdings account for about 46.87% of its total assets under management.
Performance and Risk
The ETF has gained about 9.99% and is down about -6.27% so far this year and in the past one year (as of 10/02/2025), respectively. FXZ has traded between $46.76 and $67.64 during this last 52-week period.
FXZ has a beta of 1.15 and standard deviation of 22.60% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 38 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust Materials AlphaDEX ETF is a reasonable option for investors seeking to outperform the Materials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index and the Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $5.28 billion in assets, Materials Select Sector SPDR ETF has $5.37 billion. GUNR has an expense ratio of 0.46% and XLB 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 Materials 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 Materials AlphaDEX ETF (FXZ) a Strong ETF Right Now?
Launched on 05/08/2007, the First Trust Materials AlphaDEX ETF (FXZ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Materials ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FXZ has been able to amass assets over $216.46 million, making it one of the average sized ETFs in the Materials ETFs. FXZ seeks to match the performance of the StrataQuant Materials Index before fees and expenses.
The StrataQuant Materials 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.61% for this ETF, which makes it on par with most peer products in the space.
FXZ's 12-month trailing dividend yield is 1.77%.
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.
FXZ's heaviest allocation is in the Materials sector, which is about 83.7% of the portfolio. Its Industrials and Energy round out the top three.
Looking at individual holdings, Anglogold Ashanti Plc (AU) accounts for about 6.13% of total assets, followed by Newmont Corporation (NEM) and Mueller Industries, Inc. (MLI).
FXZ's top 10 holdings account for about 46.87% of its total assets under management.
Performance and Risk
The ETF has gained about 9.99% and is down about -6.27% so far this year and in the past one year (as of 10/02/2025), respectively. FXZ has traded between $46.76 and $67.64 during this last 52-week period.
FXZ has a beta of 1.15 and standard deviation of 22.60% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 38 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust Materials AlphaDEX ETF is a reasonable option for investors seeking to outperform the Materials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index and the Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $5.28 billion in assets, Materials Select Sector SPDR ETF has $5.37 billion. GUNR has an expense ratio of 0.46% and XLB 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 Materials 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.