Designed to provide broad exposure to the Technology - Broad segment of the equity market, the First Trust Technology AlphaDEX ETF (FXL) is a passively managed exchange traded fund launched on May 8, 2007.
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.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $2.62 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.6%, making it on par with most peer products in the space.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 82.7% of the portfolio. Industrials and Telecom round out the top three.
Looking at individual holdings, Micron Technology, Inc. (MU) accounts for about 1.8% of total assets, followed by Marvell Technology, Inc. (MRVL) and Monolithic Power Systems, Inc. (MPWR).The top 10 holdings account for about 17.12% of total assets under management.
Performance and Risk
The ETF has added roughly 23.39% and was up about 31.49% so far this year and in the past one year (as of 07/13/2026), respectively. FXL has traded between $152.43 and $224.06 during this last 52-week period.
The ETF has a beta of 1.23 and standard deviation of 24.16% for the trailing three-year period, making it a medium risk choice in the space. With about 104 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.
State Street Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology Index Fund ETF Shares (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. State Street Technology Select Sector SPDR ETF has $120.85 billion in assets, Vanguard Information Technology Index Fund ETF Shares has $144.74 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
This article originally published on Zacks Investment Research (zacks.com).