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Is First Trust Materials AlphaDEX ETF (FXZ) a Strong ETF Right Now?
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The First Trust Materials AlphaDEX ETF (FXZ - Free Report) made its debut on 05/08/2007, and is a smart beta exchange traded fund that provides broad exposure to the Materials ETFs category of the market.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by First Trust Advisors, FXZ has amassed assets over $371.33 million, making it one of the average sized ETFs in the Materials ETFs. This particular fund, before fees and expenses, seeks to match the performance of the StrataQuant Materials Index.
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
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 0.64% for FXZ, making it on par with most peer products in the space.
FXZ's 12-month trailing dividend yield is 1.34%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For FXZ, it has heaviest allocation in the Materials sector --about 85.9% of the portfolio --while Industrials and Energy round out the top three.
Taking into account individual holdings, Newmont Corporation (NEM) accounts for about 5.9% of the fund's total assets, followed by Anglogold Ashanti Plc (AU) and Coeur Mining, Inc. (CDE).
The top 10 holdings account for about 44.75% of total assets under management.
Performance and Risk
The ETF has gained about 20.02% and is up about 28.88% so far this year and in the past one year (as of 10/20/2026), respectively. FXZ has traded between $57.87 and $87.56 during this last 52-week period.
The fund has a beta of 1.07 and standard deviation of 21.99% for the trailing three-year period, which makes FXZ a medium risk choice in this particular space. With about 40 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust Materials AlphaDEX ETF is a reasonable option for investors seeking to outperform the Materials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Northern Trust Mrngstr Glob 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. Northern Trust Mrngstr Glob Upstream Natural Resources ETF has $7.11 billion in assets, State Street Materials Select Sector SPDR ETF has $8.06 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?
The First Trust Materials AlphaDEX ETF (FXZ - Free Report) made its debut on 05/08/2007, and is a smart beta exchange traded fund that provides broad exposure to the Materials ETFs category of the market.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by First Trust Advisors, FXZ has amassed assets over $371.33 million, making it one of the average sized ETFs in the Materials ETFs. This particular fund, before fees and expenses, seeks to match the performance of the StrataQuant Materials Index.
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
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 0.64% for FXZ, making it on par with most peer products in the space.
FXZ's 12-month trailing dividend yield is 1.34%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For FXZ, it has heaviest allocation in the Materials sector --about 85.9% of the portfolio --while Industrials and Energy round out the top three.
Taking into account individual holdings, Newmont Corporation (NEM) accounts for about 5.9% of the fund's total assets, followed by Anglogold Ashanti Plc (AU) and Coeur Mining, Inc. (CDE).
The top 10 holdings account for about 44.75% of total assets under management.
Performance and Risk
The ETF has gained about 20.02% and is up about 28.88% so far this year and in the past one year (as of 10/20/2026), respectively. FXZ has traded between $57.87 and $87.56 during this last 52-week period.
The fund has a beta of 1.07 and standard deviation of 21.99% for the trailing three-year period, which makes FXZ a medium risk choice in this particular space. With about 40 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust Materials AlphaDEX ETF is a reasonable option for investors seeking to outperform the Materials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Northern Trust Mrngstr Glob 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. Northern Trust Mrngstr Glob Upstream Natural Resources ETF has $7.11 billion in assets, State Street Materials Select Sector SPDR ETF has $8.06 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.