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Is First Trust Consumer Discretionary AlphaDEX ETF (FXD) a Strong ETF Right Now?
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Designed to provide broad exposure to the Consumer Discretionary ETFs category of the market, the First Trust Consumer Discretionary AlphaDEX ETF (FXD - Free Report) is a smart beta exchange traded fund launched on 05/08/2007.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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.
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
The fund is managed by First Trust Advisors. FXD has been able to amass assets over $258.63 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. FXD, before fees and expenses, seeks to match the performance of the StrataQuant Consumer Discretionary Index.
The StrataQuant Consumer Discretionary Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
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.
Annual operating expenses for FXD are 0.60%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.04%.
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.
Representing 77.9% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector; Industrials and Telecom round out the top three.
Taking into account individual holdings, Tapestry, Inc. (TPR) accounts for about 1.7% of the fund's total assets, followed by Sirius Xm Holdings Inc. (SIRI) and Toll Brothers, Inc. (TOL).
The top 10 holdings account for about 15.78% of total assets under management.
Performance and Risk
The ETF has lost about -6.43% and was up about 7.88% so far this year and in the past one year (as of 03/27/2026), respectively. FXD has traded between $50.42 and $72.23 during this last 52-week period.
FXD has a beta of 1.18 and standard deviation of 20.11% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 119 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Consumer Discretionary AlphaDEX ETF is a reasonable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Consumer Discretionary Index Fund ETF Shares (VCR) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the State Street Consumer Discretionary Select Sector SPDR ETF (XLY) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary Index Fund ETF Shares has $5.66 billion in assets, State Street Consumer Discretionary Select Sector SPDR ETF has $21.7 billion. VCR has an expense ratio of 0.09% and XLY 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 Consumer Discretionary 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 Consumer Discretionary AlphaDEX ETF (FXD) a Strong ETF Right Now?
Designed to provide broad exposure to the Consumer Discretionary ETFs category of the market, the First Trust Consumer Discretionary AlphaDEX ETF (FXD - Free Report) is a smart beta exchange traded fund launched on 05/08/2007.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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.
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
The fund is managed by First Trust Advisors. FXD has been able to amass assets over $258.63 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. FXD, before fees and expenses, seeks to match the performance of the StrataQuant Consumer Discretionary Index.
The StrataQuant Consumer Discretionary Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
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.
Annual operating expenses for FXD are 0.60%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.04%.
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.
Representing 77.9% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector; Industrials and Telecom round out the top three.
Taking into account individual holdings, Tapestry, Inc. (TPR) accounts for about 1.7% of the fund's total assets, followed by Sirius Xm Holdings Inc. (SIRI) and Toll Brothers, Inc. (TOL).
The top 10 holdings account for about 15.78% of total assets under management.
Performance and Risk
The ETF has lost about -6.43% and was up about 7.88% so far this year and in the past one year (as of 03/27/2026), respectively. FXD has traded between $50.42 and $72.23 during this last 52-week period.
FXD has a beta of 1.18 and standard deviation of 20.11% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 119 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Consumer Discretionary AlphaDEX ETF is a reasonable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Consumer Discretionary Index Fund ETF Shares (VCR) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the State Street Consumer Discretionary Select Sector SPDR ETF (XLY) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary Index Fund ETF Shares has $5.66 billion in assets, State Street Consumer Discretionary Select Sector SPDR ETF has $21.7 billion. VCR has an expense ratio of 0.09% and XLY 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 Consumer Discretionary 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.