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Should You Invest in the First Trust Consumer Discretionary AlphaDEX ETF (FXD)?
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Launched on 05/08/2007, the First Trust Consumer Discretionary AlphaDEX ETF (FXD - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Discretionary - Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $206.99 million, making it one of the average sized ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. FXD seeks to match the performance of the StrataQuant Consumer Discretionary Index before fees and expenses.
The StrataQuant Consumer Discretionary Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
Costs
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.
Annual operating expenses for this ETF are 0.64%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.30%.
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 Consumer Discretionary sector--about 72.10% of the portfolio. Telecom and Industrials round out the top three.
Looking at individual holdings, Royal Caribbean Cruises Ltd. (RCL - Free Report) accounts for about 1.77% of total assets, followed by Toll Brothers, Inc. (TOL - Free Report) and Tesla, Inc. (TSLA - Free Report) .
The top 10 holdings account for about 15.99% of total assets under management.
Performance and Risk
The ETF has lost about -30.22% so far this year and is down about -27.27% in the last one year (as of 06/15/2020). In that past 52-week period, it has traded between $23.18 and $45.94.
The ETF has a beta of 1.38 and standard deviation of 28.14% for the trailing three-year period, making it a medium risk choice in the space. With about 123 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Consumer Discretionary AlphaDEX ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FXD is a reasonable option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Consumer Discretionary ETF (VCR - Free Report) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $2.86 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $13.36 billion. VCR has an expense ratio of 0.10% and XLY charges 0.13%.
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 Consumer Discretionary AlphaDEX ETF (FXD)?
Launched on 05/08/2007, the First Trust Consumer Discretionary AlphaDEX ETF (FXD - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Discretionary - Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $206.99 million, making it one of the average sized ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. FXD seeks to match the performance of the StrataQuant Consumer Discretionary Index before fees and expenses.
The StrataQuant Consumer Discretionary Index employs the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index.
Costs
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.
Annual operating expenses for this ETF are 0.64%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.30%.
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 Consumer Discretionary sector--about 72.10% of the portfolio. Telecom and Industrials round out the top three.
Looking at individual holdings, Royal Caribbean Cruises Ltd. (RCL - Free Report) accounts for about 1.77% of total assets, followed by Toll Brothers, Inc. (TOL - Free Report) and Tesla, Inc. (TSLA - Free Report) .
The top 10 holdings account for about 15.99% of total assets under management.
Performance and Risk
The ETF has lost about -30.22% so far this year and is down about -27.27% in the last one year (as of 06/15/2020). In that past 52-week period, it has traded between $23.18 and $45.94.
The ETF has a beta of 1.38 and standard deviation of 28.14% for the trailing three-year period, making it a medium risk choice in the space. With about 123 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Consumer Discretionary AlphaDEX ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FXD is a reasonable option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Consumer Discretionary ETF (VCR - Free Report) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $2.86 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $13.36 billion. VCR has an expense ratio of 0.10% and XLY charges 0.13%.
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.