Should You Invest in the First Trust Utilities AlphaDEX ETF (FXU)?

Core Insights - The First Trust Utilities AlphaDEX ETF (FXU) is a passively managed ETF launched on May 8, 2007, providing broad exposure to the Utilities - Broad segment of the equity market [1] - FXU has gained popularity among retail and institutional investors due to its low costs, transparency, flexibility, and tax efficiency, making it suitable for long-term investment [1] Fund Overview - FXU is sponsored by First Trust Advisors and has assets exceeding $1.68 billion, categorizing it as an average-sized ETF in the Utilities - Broad segment [3] - The ETF aims to match the performance of the StrataQuant Utilities Index, which uses a modified equal-dollar weighted methodology to select stocks from the Russell 1000 Index [4] Cost Structure - The annual operating expenses for FXU are 0.63%, which is relatively high compared to other ETFs in the sector, and it has a 12-month trailing dividend yield of 2.12% [5] Sector Exposure and Holdings - FXU has a significant allocation in the Utilities sector, comprising approximately 97.6% of its portfolio [6] - The top holdings include Edison International (EIX) at 4.23%, followed by Evergy, Inc. (EVRG) and PG&E Corporation (PCG), with the top 10 holdings accounting for about 40.08% of total assets [7] Performance Metrics - As of July 28, 2025, FXU has increased by about 17.43% year-to-date and approximately 32.34% over the past year, with a trading range between $34.34 and $44.12 in the last 52 weeks [8] - The ETF has a beta of 0.64 and a standard deviation of 17.33% over the trailing three-year period, indicating medium risk with more concentrated exposure than its peers [8] Alternatives - FXU has a Zacks ETF Rank of 4 (Sell), suggesting it may not be the best option for investors seeking exposure to the Utilities/Infrastructure ETFs segment [9] - Alternative ETFs include the Vanguard Utilities ETF (VPU) with $7.29 billion in assets and an expense ratio of 0.09%, and the Utilities Select Sector SPDR ETF (XLU) with $20.72 billion in assets and an expense ratio of 0.08% [10]