The First Trust Technology AlphaDEX ETF (FXL) was launched on 05/08/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Broad segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.20 billion, making it one of the larger ETFs attempting to match the performance of the Technology - Broad segment of the equity market. FXL seeks to match the performance of the StrataQuant Technology Index before fees and expenses.
The StrataQuant Technology 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 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.04%.
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 Information Technology sector--about 79.40% of the portfolio. Industrials and Telecom round out the top three.
Looking at individual holdings, Concentrix Corporation (CNXC) accounts for about 2.43% of total assets, followed by Palantir Technologies Inc. (class A) (PLTR) and Doordash, Inc. (class A) (DASH).
The top 10 holdings account for about 19.01% of total assets under management.
Performance and Risk
So far this year, FXL has lost about -8.85%, and was up about 6.20% in the last one year (as of 04/28/2025). During this past 52-week period, the fund has traded between $115.28 and $160.72.
The ETF has a beta of 1.20 and standard deviation of 26.16% for the trailing three-year period, making it a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Technology 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, FXL is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $64.38 billion in assets, Vanguard Information Technology ETF has $75.88 billion. XLK has an expense ratio of 0.08% and VGT charges 0.09%.
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 Technology AlphaDEX ETF (FXL): ETF Research Reports Technology Select Sector SPDR ETF (XLK): ETF Research Reports Concentrix Corporation (CNXC): Free Stock Analysis Report Vanguard Information Technology ETF (VGT): ETF Research Reports Palantir Technologies Inc. (PLTR): Free Stock Analysis Report DoorDash, Inc. (DASH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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