Is First Trust Large Cap Core AlphaDEX ETF a Strong ETF Right Now? "First Trust Large Cap Core AlphaDEX ETF, Nasdaq AlphaDEX Large Cap Core Index, First Trust Advisors, Nvidia Corporation, Vistra Corp., Crowdstrike Holdings, Inc., Style Box - Large Cap Blend, iShares Core S&P 500 ETF, SPDR S&P 500 ETF, Beta, Standard deviation, Dividend .. by https://www.benzinga.com/
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Simple Explanation:
the article talks about a special kind of investment called smart beta exchange traded fund, which is like a basket of different stocks. First Trust Large Cap Core AlphaDEX ETF is one such basket. It is a mix of big companies, and it aims to help investors beat the market by picking good stocks. This basket has some risks, but it also helps to spread the risk among different stocks. The article explains that this basket has done well in the past year and has some costs associated with it. There are also other similar baskets available for investors to choose from. Read from source...
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Investment Analysis:
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1. First Trust Large Cap Core AlphaDEX ETF (FEX) is a smart beta ETF that offers exposure to the Style Box - Large Cap Blend category of the market. It seeks to match the performance of the Nasdaq AlphaDEX Large Cap Core Index, which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 500 Large Cap Index. FEX has a beta of 1.05 and standard deviation of 16.93% for the trailing three-year period, making it a medium-risk choice in the space. It effectively diversifies company-specific risk with about 376 holdings. However, investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
### ASK:
What is the expense ratio of FEX, and how does it compare to its peers in the space?
### AI:
The expense ratio of FEX is 0.60%, which is on par with most of its peer products in the space. However, cheaper options are available in the form of traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend. For example, iShares Core S&P 500 ETF (IVV) has an expense ratio of 0.03%, and SPDR S&P 500 ETF has an expense ratio of 0.09%.