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Should You Invest in the First Trust Materials AlphaDEX ETF (FXZ)?
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Launched on May 8, 2007, the First Trust Materials AlphaDEX ETF (FXZ - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Materials - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $427.27 million, making it one of the average sized ETFs attempting to match the performance of the Materials - Broad segment of the equity market. 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.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.64%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.41%.
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 Materials sector -- about 78.7% of the portfolio, followed by Industrials.
Looking at individual holdings, Anglogold Ashanti Plc (AU) accounts for about 4.88% of total assets, followed by The Mosaic Company (MOS) and Cf Industries Holdings, Inc. (CF).
The top 10 holdings account for about 43.81% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Materials AlphaDEX ETF has gained about 26.87% so far, and is up about 47.05% over the last 12 months (as of 06/10/2026). FXZ has traded between $55.99 and $84.09 in this past 52-week period.
The ETF has a beta of 1.02 and standard deviation of 21.44% for the trailing three-year period, making it a medium risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Materials AlphaDEX ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FXZ, then, is not the best option for investors seeking exposure to the Materials ETFs segment of the market. However, there are better ETFs in the space to consider.
FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index and the State Street Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $7.07 billion in assets, State Street Materials Select Sector SPDR ETF has $7.81 billion. GUNR has an expense ratio of 0.46%, and XLB charges 0.08%.
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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Should You Invest in the First Trust Materials AlphaDEX ETF (FXZ)?
Launched on May 8, 2007, the First Trust Materials AlphaDEX ETF (FXZ - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Materials - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $427.27 million, making it one of the average sized ETFs attempting to match the performance of the Materials - Broad segment of the equity market. 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.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.64%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.41%.
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 Materials sector -- about 78.7% of the portfolio, followed by Industrials.
Looking at individual holdings, Anglogold Ashanti Plc (AU) accounts for about 4.88% of total assets, followed by The Mosaic Company (MOS) and Cf Industries Holdings, Inc. (CF).The top 10 holdings account for about 43.81% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Materials AlphaDEX ETF has gained about 26.87% so far, and is up about 47.05% over the last 12 months (as of 06/10/2026). FXZ has traded between $55.99 and $84.09 in this past 52-week period.
The ETF has a beta of 1.02 and standard deviation of 21.44% for the trailing three-year period, making it a medium risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Materials AlphaDEX ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FXZ, then, is not the best option for investors seeking exposure to the Materials ETFs segment of the market. However, there are better ETFs in the space to consider.
FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index and the State Street Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $7.07 billion in assets, State Street Materials Select Sector SPDR ETF has $7.81 billion. GUNR has an expense ratio of 0.46%, and XLB charges 0.08%.
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.