If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the First Trust Large Cap Core AlphaDEX ETF (FEX), a passively managed exchange traded fund launched on May 8, 2007.
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.41 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 0.57%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.06%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector -- about 16.8% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Micron Technology, Inc. (MU) accounts for about 0.62% of 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
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.
The ETF has gained about 3.59% so far this year and was up about 17.69% in the last one year (as of 01/15/2026). In the past 52-week period, it has traded between $90.17 and $122.87.
The ETF has a beta of 0.98 and standard deviation of 14.88% for the trailing three-year period, making it 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 holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FEX is an outstanding option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV) and the Vanguard S&P 500 ETF (VOO) track a similar index. While iShares Core S&P 500 ETF has $769.29 billion in assets, Vanguard S&P 500 ETF has $848.11 billion. IVV has an expense ratio of 0.03% and VOO charges 0.03%.
Bottom-Line
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.
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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