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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 long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
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 managed by First Trust Advisors. FXD has been able to amass assets over $263.3 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. This particular fund seeks to match the performance of the StrataQuant Consumer Discretionary Index before fees and expenses.
The StrataQuant Consumer Discretionary Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
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.
Operating expenses on an annual basis are 0.60% for FXD, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.76%.
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.
Representing 76% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector; Industrials and Telecom round out the top three.
Looking at individual holdings, Pvh Corp. (PVH) accounts for about 1.64% of total assets, followed by The Gap, Inc. (GAP) and Burlington Stores, Inc. (BURL).
Its top 10 holdings account for approximately 14.8% of FXD's total assets under management.
Performance and Risk
The ETF has added roughly 0.24% so far this year and is up roughly 11.59% in the last one year (as of 05/29/2026). In the past 52-week period, it has traded between $60.72 and $72.23
The fund has a beta of 1.14 and standard deviation of 20.40% for the trailing three-year period, which makes FXD a medium risk choice in this particular space. With about 119 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Consumer Discretionary AlphaDEX ETF is not a suitable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $6.3 billion in assets, State Street Consumer Discretionary Select Sector SPDR ETF has $23.33 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 long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
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 managed by First Trust Advisors. FXD has been able to amass assets over $263.3 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. This particular fund seeks to match the performance of the StrataQuant Consumer Discretionary Index before fees and expenses.
The StrataQuant Consumer Discretionary Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
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.
Operating expenses on an annual basis are 0.60% for FXD, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.76%.
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.
Representing 76% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector; Industrials and Telecom round out the top three.
Looking at individual holdings, Pvh Corp. (PVH) accounts for about 1.64% of total assets, followed by The Gap, Inc. (GAP) and Burlington Stores, Inc. (BURL).
Its top 10 holdings account for approximately 14.8% of FXD's total assets under management.
Performance and Risk
The ETF has added roughly 0.24% so far this year and is up roughly 11.59% in the last one year (as of 05/29/2026). In the past 52-week period, it has traded between $60.72 and $72.23
The fund has a beta of 1.14 and standard deviation of 20.40% for the trailing three-year period, which makes FXD a medium risk choice in this particular space. With about 119 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Consumer Discretionary AlphaDEX ETF is not a suitable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $6.3 billion in assets, State Street Consumer Discretionary Select Sector SPDR ETF has $23.33 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.