The First Trust Consumer Staples AlphaDEX ETF (FXG) made its debut on 05/08/2007, and is a smart beta exchange traded fund that provides broad exposure to the Consumer Staples 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.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by First Trust Advisors, FXG has amassed assets over $284.05 million, making it one of the average sized ETFs in the Consumer Staples ETFs. FXG, before fees and expenses, seeks to match the performance of the StrataQuant Consumer Staples Index.
The StrataQuant Consumer Staples 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
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.
Operating expenses on an annual basis are 0.62% for this ETF, which makes it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.24%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 87.7% of the portfolio, the fund has heaviest allocation to the Consumer Staples sector; Healthcare and Materials round out the top three.
Looking at individual holdings, Pilgrim's Pride Corporation (PPC) accounts for about 4.56% of total assets, followed by The Kraft Heinz Company (KHC) and Molson Coors Beverage Company (TAP).
FXG's top 10 holdings account for about 40.2% of its total assets under management.
Performance and Risk
Year-to-date, the First Trust Consumer Staples AlphaDEX ETF return is roughly 1.03% so far, and is down about -3.4% over the last 12 months (as of 09/11/2025). FXG has traded between $61.21 $70.06 in this past 52-week period.
FXG has a beta of 0.57 and standard deviation of 12.82% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust Consumer Staples AlphaDEX ETF is a reasonable option for investors seeking to outperform the Consumer Staples ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Consumer Staples ETF (VDC) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR ETF (XLP) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $7.46 billion in assets, Consumer Staples Select Sector SPDR ETF has $15.98 billion. VDC has an expense ratio of 0.09% and XLP 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 Consumer Staples 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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First Trust Consumer Staples AlphaDEX ETF (FXG): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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