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Is First Trust Technology AlphaDEX ETF (FXL) a Strong ETF Right Now?
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The First Trust Technology AlphaDEX ETF (FXL - Free Report) made its debut on 05/08/2007, and is a smart beta exchange traded fund that provides broad exposure to the Technology 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
FXL is managed by First Trust Advisors, and this fund has amassed over $1.38 billion, which makes it one of the larger ETFs in the Technology ETFs. FXL seeks to match the performance of the StrataQuant Technology Index before fees and expenses.
The StrataQuant Technology 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for FXL are 0.60%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.03%.
Sector Exposure and Top Holdings
ETFs offer 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.
FXL's heaviest allocation is in the Information Technology sector, which is about 80.2% of the portfolio. Its Industrials and Telecom round out the top three.
Looking at individual holdings, Vertiv Holdings Co (VRT) accounts for about 2.09% of total assets, followed by Pure Storage, Inc. (class A) (PSTG) and Amkor Technology, Inc. (AMKR).
Its top 10 holdings account for approximately 18.72% of FXL's total assets under management.
Performance and Risk
The ETF return is roughly 10.01% and it's up approximately 5.21% so far this year and in the past one year (as of 11/26/2025), respectively. FXL has traded between $115.28 and $176.31 during this last 52-week period.
The ETF has a beta of 1.20 and standard deviation of 23.24% for the trailing three-year period, making it a medium risk choice in the space. With about 100 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Technology AlphaDEX ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $91.54 billion in assets, Vanguard Information Technology ETF has $110.98 billion. XLK has an expense ratio of 0.08% and VGT changes 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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 Technology AlphaDEX ETF (FXL) a Strong ETF Right Now?
The First Trust Technology AlphaDEX ETF (FXL - Free Report) made its debut on 05/08/2007, and is a smart beta exchange traded fund that provides broad exposure to the Technology 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
FXL is managed by First Trust Advisors, and this fund has amassed over $1.38 billion, which makes it one of the larger ETFs in the Technology ETFs. FXL seeks to match the performance of the StrataQuant Technology Index before fees and expenses.
The StrataQuant Technology 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for FXL are 0.60%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.03%.
Sector Exposure and Top Holdings
ETFs offer 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.
FXL's heaviest allocation is in the Information Technology sector, which is about 80.2% of the portfolio. Its Industrials and Telecom round out the top three.
Looking at individual holdings, Vertiv Holdings Co (VRT) accounts for about 2.09% of total assets, followed by Pure Storage, Inc. (class A) (PSTG) and Amkor Technology, Inc. (AMKR).
Its top 10 holdings account for approximately 18.72% of FXL's total assets under management.
Performance and Risk
The ETF return is roughly 10.01% and it's up approximately 5.21% so far this year and in the past one year (as of 11/26/2025), respectively. FXL has traded between $115.28 and $176.31 during this last 52-week period.
The ETF has a beta of 1.20 and standard deviation of 23.24% for the trailing three-year period, making it a medium risk choice in the space. With about 100 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Technology AlphaDEX ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $91.54 billion in assets, Vanguard Information Technology ETF has $110.98 billion. XLK has an expense ratio of 0.08% and VGT changes 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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.