Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the First Trust Large Cap Core AlphaDEX ETF (FEX) is a passively managed exchange traded fund launched on May 8, 2007.
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.49 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.57%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.01%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector -- about 17.2% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Cf Industries Holdings, Inc. (CF) accounts for about 0.72% of total assets, followed by Seagate Technology Holdings Plc (STX) and Vertiv Holdings Co (class A) (VRT).
The top 10 holdings account for about 6.45% of total assets under management.
Performance and Risk
FEX seeks to match the performance of the Nasdaq AlphaDEX Large Cap Core Index before fees and expenses. The NASDAQ AlphaDEX Large Cap Core Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 500 Large Cap Index.
The ETF return is roughly 9.11% so far this year and it's up approximately 22.09% in the last one year (as of 05/20/2026). In the past 52-week period, it has traded between $103.91 and $132.55.
The ETF has a beta of 0.95 and standard deviation of 14.5% for the trailing three-year period, making it a medium risk choice in the space. With about 377 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Large Cap Core 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, FEX is a sufficient option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the Vanguard 500 Index Fund ETF Shares (VOO) track a similar index. While iShares Core S&P 500 ETF has $821.81 billion in assets, Vanguard 500 Index Fund ETF Shares has $949.45 billion. IVV has an expense ratio of 0.03% and VOO charges 0.03%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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 Large Cap Core AlphaDEX ETF (FEX): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).