The First Trust Utilities AlphaDEX ETF (FXU) was launched on May 8, 2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Utilities - 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.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.78 billion, making it one of the average sized ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. FXU seeks to match the performance of the StrataQuant Utilities Index before fees and expenses.
The StrataQuant Utilities 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.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.63%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 2.07%.
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 Utilities sector -- about 97.6% of the portfolio.
Looking at individual holdings, Pg&e Corporation (PCG) accounts for about 4.42% of total assets, followed by Mdu Resources Group, Inc. (MDU) and Vistra Corp. (VST).
The top 10 holdings account for about 40.64% of total assets under management.
Performance and Risk
The ETF return is roughly 23.37% so far this year and is up about 16.66% in the last one year (as of 12/03/2025). In that past 52-week period, it has traded between $37.15 and $47.55.
The ETF has a beta of 0.72 and standard deviation of 15.86% for the trailing three-year period, making it a medium risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Utilities 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, FXU is a good option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Utilities ETF (VPU) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $7.93 billion in assets, Utilities Select Sector SPDR ETF has $21.79 billion. VPU has an expense ratio of 0.09%, and XLU charges 0.08%.
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 Utilities AlphaDEX ETF (FXU): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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