Designed to provide broad exposure to the Industrials - Broad segment of the equity market, the First Trust Industrials/Producer Durables AlphaDEX ETF (FXR) is a passively managed exchange traded fund launched on 05/08/2007.
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 are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
The fund is sponsored by First Trust Advisors. It has amassed assets over $2.17 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Broad segment of the equity market. FXR seeks to match the performance of the StrataQuant Industrials Index before fees and expenses.
The StrataQuant Industrials 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.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.61%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0.68%.
ETFs offer a 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.
This ETF has heaviest allocation in the Industrials sector--about 69.80% of the portfolio. Materials and Financials round out the top three.
Looking at individual holdings, Snap-On Incorporated (SNA) accounts for about 1.41% of total assets, followed by Wesco International, Inc. (WCC) and Synchrony Financial (SYF).
The top 10 holdings account for about 13.18% of total assets under management.
Year-to-date, the First Trust Industrials/Producer Durables AlphaDEX ETF has added roughly 28.15% so far, and is up about 40.99% over the last 12 months (as of 11/28/2024). FXR has traded between $58.95 and $83.27 in this past 52-week period.
The ETF has a beta of 1.18 and standard deviation of 20.49% for the trailing three-year period, making it a medium risk choice in the space. With about 140 holdings, it effectively diversifies company-specific risk.
First Trust Industrials/Producer Durables 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, FXR is a reasonable option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $6 billion in assets, Industrial Select Sector SPDR ETF has $22.06 billion. VIS has an expense ratio of 0.10% and XLI charges 0.09%.
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 Industrials/Producer Durables AlphaDEX ETF (FXR): ETF Research Reports
Snap-On Incorporated (SNA) : Free Stock Analysis Report
WESCO International, Inc. (WCC) : Free Stock Analysis Report
Vanguard Industrials ETF (VIS): ETF Research Reports
Industrial Select Sector SPDR ETF (XLI): ETF Research Reports
$Synchrony Financial(SYF-B)$ (SYF) : Free Stock Analysis Report
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