The First Trust Large Cap Core AlphaDEX ETF (FEX) made its debut on 05/08/2007, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors, and has been able to amass over $1.39 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Blend. FEX seeks to match the performance of the Nasdaq AlphaDEX Large Cap Core Index before fees and expenses.
The NASDAQ AlphaDEX Large Cap Core Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 500 Large Cap Index.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.57% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.08%.
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 FEX, it has heaviest allocation in the Financials sector --about 16.6% of the portfolio --while Industrials and Information Technology round out the top three.
When you look at individual holdings, Micron Technology, Inc. (MU) accounts for about 0.62% of the fund's total assets, followed by Coherent Corp. (COHR) and Illumina, Inc. (ILMN).
The top 10 holdings account for about 5.6% of total assets under management.
Performance and Risk
So far this year, FEX has gained about 16.46%, and is up roughly 14.3% in the last one year (as of 12/29/2025). During this past 52-week period, the fund has traded between $90.17 and $120.87.
FEX has a beta of 0.98 and standard deviation of 14.96% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 376 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Large Cap Core AlphaDEX ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
iShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO) tracks S&P 500 Index. iShares Core S&P 500 ETF has $768.2 billion in assets, Vanguard S&P 500 ETF has $832.27 billion. IVV has an expense ratio of 0.03% and VOO changes 0.03%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend
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 Large Cap Core AlphaDEX ETF (FEX): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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