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Is First Trust Health Care AlphaDEX ETF (FXH) a Strong ETF Right Now?
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Designed to provide broad exposure to the Health Care ETFs category of the market, the First Trust Health Care AlphaDEX ETF (FXH - 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.
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.
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
FXH is managed by First Trust Advisors, and this fund has amassed over $1.17 billion, which makes it one of the larger ETFs in the Health Care ETFs. This particular fund seeks to match the performance of the StrataQuant Health Care Index before fees and expenses.
The StrataQuant Health Care Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.61%.
It's 12-month trailing dividend yield comes in at 0.76%.
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 Healthcare sector - about 100% of the portfolio.
When you look at individual holdings, Regeneron Pharmaceuticals, Inc. (REGN) accounts for about 2.46% of the fund's total assets, followed by Boston Scientific Corporation (BSX) and The Cigna Group (CI).
Its top 10 holdings account for approximately 24.03% of FXH's total assets under management.
Performance and Risk
The ETF return is roughly 18.7% so far this year and was up about 25.42% in the last one year (as of 08/25/2026). In the past 52-week period, it has traded between $104.58 and $135.22
The fund has a beta of 0.73 and standard deviation of 15.51% for the trailing three-year period, which makes FXH a medium risk choice in this particular space. With about 74 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Health Care AlphaDEX ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Health Care Index Fund ETF Shares (VHT) tracks MSCI US Investable Market Health Care 25/50 Index and the State Street Health Care Select Sector SPDR ETF ETF (XLV) tracks Health Care Select Sector Index. Vanguard Health Care Index Fund ETF Shares has $19.66 billion in assets, State Street Health Care Select Sector SPDR ETF ETF has $45.35 billion. VHT has an expense ratio of 0.09% and XLV 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 Health Care 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 Health Care AlphaDEX ETF (FXH) a Strong ETF Right Now?
Designed to provide broad exposure to the Health Care ETFs category of the market, the First Trust Health Care AlphaDEX ETF (FXH - 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.
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.
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
FXH is managed by First Trust Advisors, and this fund has amassed over $1.17 billion, which makes it one of the larger ETFs in the Health Care ETFs. This particular fund seeks to match the performance of the StrataQuant Health Care Index before fees and expenses.
The StrataQuant Health Care Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.61%.
It's 12-month trailing dividend yield comes in at 0.76%.
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 Healthcare sector - about 100% of the portfolio.
When you look at individual holdings, Regeneron Pharmaceuticals, Inc. (REGN) accounts for about 2.46% of the fund's total assets, followed by Boston Scientific Corporation (BSX) and The Cigna Group (CI).
Its top 10 holdings account for approximately 24.03% of FXH's total assets under management.
Performance and Risk
The ETF return is roughly 18.7% so far this year and was up about 25.42% in the last one year (as of 08/25/2026). In the past 52-week period, it has traded between $104.58 and $135.22
The fund has a beta of 0.73 and standard deviation of 15.51% for the trailing three-year period, which makes FXH a medium risk choice in this particular space. With about 74 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Health Care AlphaDEX ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Health Care Index Fund ETF Shares (VHT) tracks MSCI US Investable Market Health Care 25/50 Index and the State Street Health Care Select Sector SPDR ETF ETF (XLV) tracks Health Care Select Sector Index. Vanguard Health Care Index Fund ETF Shares has $19.66 billion in assets, State Street Health Care Select Sector SPDR ETF ETF has $45.35 billion. VHT has an expense ratio of 0.09% and XLV 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 Health Care 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.