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Is First Trust Materials AlphaDEX ETF (FXZ) a Strong ETF Right Now?
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Launched on 05/08/2007, the First Trust Materials AlphaDEX ETF (FXZ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Materials 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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $446.36 million, making it one of the average sized ETFs in the Materials ETFs. This particular fund 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.
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.
Operating expenses on an annual basis are 0.64% for FXZ, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.37%.
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.
This ETF has heaviest allocation in the Materials sector - about 78.7% of the portfolio. Industrials and Energy round out the top three.
Taking into account individual holdings, Anglogold Ashanti Plc (AU) accounts for about 4.88% of the fund's 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
The ETF has added about 31.24% and is up about 52.65% so far this year and in the past one year (as of 06/16/2026), respectively. FXZ has traded between $55.99 and $84.83 during this last 52-week period.
FXZ has a beta of 1.02 and standard deviation of 21.57% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust Materials AlphaDEX ETF is not a suitable option for investors seeking to outperform the Materials ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $7.2 billion in assets, State Street Materials Select Sector SPDR ETF has $8.13 billion. GUNR has an expense ratio of 0.46% and XLB 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 Materials 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 Materials AlphaDEX ETF (FXZ) a Strong ETF Right Now?
Launched on 05/08/2007, the First Trust Materials AlphaDEX ETF (FXZ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Materials 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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $446.36 million, making it one of the average sized ETFs in the Materials ETFs. This particular fund 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.
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.
Operating expenses on an annual basis are 0.64% for FXZ, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.37%.
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.
This ETF has heaviest allocation in the Materials sector - about 78.7% of the portfolio. Industrials and Energy round out the top three.
Taking into account individual holdings, Anglogold Ashanti Plc (AU) accounts for about 4.88% of the fund's 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
The ETF has added about 31.24% and is up about 52.65% so far this year and in the past one year (as of 06/16/2026), respectively. FXZ has traded between $55.99 and $84.83 during this last 52-week period.
FXZ has a beta of 1.02 and standard deviation of 21.57% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust Materials AlphaDEX ETF is not a suitable option for investors seeking to outperform the Materials ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $7.2 billion in assets, State Street Materials Select Sector SPDR ETF has $8.13 billion. GUNR has an expense ratio of 0.46% and XLB 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 Materials 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.