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Is First Trust Technology AlphaDEX ETF (FXL) a Strong ETF Right Now?
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A smart beta exchange traded fund, the First Trust Technology AlphaDEX ETF (FXL - Free Report) debuted on 05/08/2007, and offers broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 managed by First Trust Advisors. FXL has been able to amass assets over $2.94 billion, making it one of the larger ETFs in the Technology ETFs. Before fees and expenses, this particular fund seeks to match the performance of the StrataQuant Technology Index.
The StrataQuant Technology 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.60% for FXL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.00%.
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.
Representing 86.9% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Telecom round out the top three.
When you look at individual holdings, Cognizant Technology Solutions Corporation (CTSH) accounts for about 2.47% of the fund's total assets, followed by Epam Systems, Inc. (EPAM) and Leidos Holdings, Inc. (LDOS).
FXL's top 10 holdings account for about 19.07% of its total assets under management.
Performance and Risk
So far this year, FXL has added about 36.95%, and is up roughly 34.07% in the last one year (as of 10/07/2026). During this past 52-week period, the fund has traded between $152.43 and $230.46.
The ETF has a beta of 1.26 and standard deviation of 24.58% for the trailing three-year period, making it a medium risk choice in the space. With about 111 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Technology AlphaDEX ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
State Street Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology Index Fund ETF Shares (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. State Street Technology Select Sector SPDR ETF has $131.73 billion in assets, Vanguard Information Technology Index Fund ETF Shares has $159.07 billion. XLK has an expense ratio of 0.08% and VGT changes 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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 Technology AlphaDEX ETF (FXL) a Strong ETF Right Now?
A smart beta exchange traded fund, the First Trust Technology AlphaDEX ETF (FXL - Free Report) debuted on 05/08/2007, and offers broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 managed by First Trust Advisors. FXL has been able to amass assets over $2.94 billion, making it one of the larger ETFs in the Technology ETFs. Before fees and expenses, this particular fund seeks to match the performance of the StrataQuant Technology Index.
The StrataQuant Technology 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.60% for FXL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.00%.
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.
Representing 86.9% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Telecom round out the top three.
When you look at individual holdings, Cognizant Technology Solutions Corporation (CTSH) accounts for about 2.47% of the fund's total assets, followed by Epam Systems, Inc. (EPAM) and Leidos Holdings, Inc. (LDOS).
FXL's top 10 holdings account for about 19.07% of its total assets under management.
Performance and Risk
So far this year, FXL has added about 36.95%, and is up roughly 34.07% in the last one year (as of 10/07/2026). During this past 52-week period, the fund has traded between $152.43 and $230.46.
The ETF has a beta of 1.26 and standard deviation of 24.58% for the trailing three-year period, making it a medium risk choice in the space. With about 111 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Technology AlphaDEX ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
State Street Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology Index Fund ETF Shares (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. State Street Technology Select Sector SPDR ETF has $131.73 billion in assets, Vanguard Information Technology Index Fund ETF Shares has $159.07 billion. XLK has an expense ratio of 0.08% and VGT changes 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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.