The First Trust Energy AlphaDEX ETF (FXN) was launched on May 8, 2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Energy - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - 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 $263.97 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. FXN seeks to match the performance of the StrataQuant Energy Index before fees and expenses.
The StrataQuant Energy 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.63%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.49%.
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.
This ETF has heaviest allocation in the Energy sector -- about 96.5% of the portfolio.
Looking at individual holdings, Permian Resources Corp. (PR) accounts for about 5.23% of total assets, followed by Coterra Energy Inc. (CTRA) and Diamondback Energy, Inc. (FANG).
The top 10 holdings account for about 44.34% of total assets under management.
Performance and Risk
So far this year, FXN has added about 1.88%, and is up roughly 1.4% in the last one year (as of 01/12/2026). During this past 52-week period, the fund has traded between $12.88 and $18.07.
The ETF has a beta of 0.70 and standard deviation of 25.71% for the trailing three-year period, making it a high risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Energy AlphaDEX ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FXN, then, is not a great choice for investors seeking exposure to the Energy ETFs segment of the market. Instead, there are better ETFs in the space to consider.
Vanguard Energy ETF (VDE) tracks MSCI US Investable Market Energy 25/50 Index and the State Street Energy Select Sector SPDR ETF (XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.31 billion in assets, State Street Energy Select Sector SPDR ETF has $28.14 billion. VDE has an expense ratio of 0.09%, and XLE 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 Energy AlphaDEX ETF (FXN): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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