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Is First Trust Energy AlphaDEX ETF (FXN) a Strong ETF Right Now?
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The First Trust Energy AlphaDEX ETF (FXN - Free Report) was launched on 05/08/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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 sponsored by First Trust Advisors. It has amassed assets over $276.05 million, making it one of the average sized ETFs in the Energy ETFs. FXN seeks to match the performance of the StrataQuant Energy Index before fees and expenses.
The StrataQuant Energy 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for FXN are 0.61%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.37%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector - about 96.4% of the portfolio.
Looking at individual holdings, Diamondback Energy, Inc. (FANG) accounts for about 4.93% of total assets, followed by Coterra Energy Inc. (CTRA) and Eog Resources, Inc. (EOG).
FXN's top 10 holdings account for about 43.33% of its total assets under management.
Performance and Risk
Year-to-date, the First Trust Energy AlphaDEX ETF has added roughly 4% so far, and is down about -2.03% over the last 12 months (as of 11/17/2025). FXN has traded between $12.88 $18.08 in this past 52-week period.
FXN has a beta of 0.88 and standard deviation of 26.27% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust Energy AlphaDEX ETF is not a suitable option for investors seeking to outperform the Energy ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Energy ETF (VDE) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.33 billion in assets, Energy Select Sector SPDR ETF has $28.12 billion. VDE has an expense ratio of 0.09% and XLE 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 Energy 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 Energy AlphaDEX ETF (FXN) a Strong ETF Right Now?
The First Trust Energy AlphaDEX ETF (FXN - Free Report) was launched on 05/08/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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 sponsored by First Trust Advisors. It has amassed assets over $276.05 million, making it one of the average sized ETFs in the Energy ETFs. FXN seeks to match the performance of the StrataQuant Energy Index before fees and expenses.
The StrataQuant Energy 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for FXN are 0.61%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.37%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector - about 96.4% of the portfolio.
Looking at individual holdings, Diamondback Energy, Inc. (FANG) accounts for about 4.93% of total assets, followed by Coterra Energy Inc. (CTRA) and Eog Resources, Inc. (EOG).
FXN's top 10 holdings account for about 43.33% of its total assets under management.
Performance and Risk
Year-to-date, the First Trust Energy AlphaDEX ETF has added roughly 4% so far, and is down about -2.03% over the last 12 months (as of 11/17/2025). FXN has traded between $12.88 $18.08 in this past 52-week period.
FXN has a beta of 0.88 and standard deviation of 26.27% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust Energy AlphaDEX ETF is not a suitable option for investors seeking to outperform the Energy ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Energy ETF (VDE) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.33 billion in assets, Energy Select Sector SPDR ETF has $28.12 billion. VDE has an expense ratio of 0.09% and XLE 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 Energy 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.