In This Article:
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 05/08/2007.
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.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.19 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
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 0.61%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.26%.
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 90.90% of the portfolio.
Looking at individual holdings, Advanced Micro Devices, Inc. (AMD) accounts for about 2.76% of total assets, followed by Amdocs Limited (DOX) and Hewlett Packard Enterprise Company (HPE).
The top 10 holdings account for about 19.03% of total assets under management.
Performance and Risk
The ETF has lost about -21.90% so far this year and is down about -10.97% in the last one year (as of 05/09/2022). In that past 52-week period, it has traded between $102.51 and $138.38.