Should First Trust Large Cap Core AlphaDEX ETF (FEX) Be on Your Investing Radar?

Core Insights - The First Trust Large Cap Core AlphaDEX ETF (FEX) is a passively managed ETF launched on May 8, 2007, with assets exceeding $1.38 billion, targeting the Large Cap Blend segment of the US equity market [1] Group 1: Large Cap Blend Overview - Large cap companies have market capitalizations above $10 billion, offering more predictable cash flows and lower volatility compared to mid and small cap companies [2] - Blend ETFs typically hold a mix of growth and value stocks, combining characteristics of both investment styles [2] Group 2: Cost Structure - FEX has annual operating expenses of 0.58%, which is competitive within its peer group [3] - The ETF offers a 12-month trailing dividend yield of 1.14% [3] Group 3: Sector Exposure and Holdings - The ETF's largest sector allocation is to Financials at approximately 18.9%, followed by Industrials and Information Technology [4] - Palantir Technologies Inc. (PLTR) represents about 0.6% of total assets, with the top 10 holdings accounting for roughly 5.37% of total assets under management [5] Group 4: Performance Metrics - FEX aims to replicate the performance of the Nasdaq AlphaDEX Large Cap Core Index, having increased by approximately 12.81% year-to-date and 18.77% over the past year as of September 12, 2025 [6] - The ETF has traded between $90.17 and $117.08 in the past 52 weeks [6] Group 5: Risk Assessment - FEX has a beta of 0.99 and a standard deviation of 16.28% over the trailing three-year period, categorizing it as a medium risk investment [7] - The ETF consists of about 376 holdings, effectively diversifying company-specific risk [7] Group 6: Alternatives - FEX holds a Zacks ETF Rank of 2 (Buy), indicating strong expected returns and favorable expense ratios [8] - Other comparable ETFs include the iShares Core S&P 500 ETF (IVV) and the Vanguard S&P 500 ETF (VOO), with assets of $674.11 billion and $749.17 billion respectively, both having an expense ratio of 0.03% [9] Group 7: Market Trends - Passively managed ETFs are gaining popularity among both institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency, making them suitable for long-term investment strategies [10]