Is First Trust Consumer Staples AlphaDEX ETF (FXG) a Strong ETF Right Now?

Designed to provide broad exposure to the Consumer Staples ETFs category of the market, the First Trust Consumer Staples AlphaDEX ETF (FXG) is a smart beta exchange traded fund launched on 05/08/2007.What Are Smart Beta ETFs?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.Fund Sponsor & IndexBecause the fund has amassed over $264.18 million, this makes it one of the average sized ETFs in the Consumer Staples ETFs. FXG is managed by First Trust Advisors. This particular fund, before fees and expenses, seeks to match the performance of the StrataQuant Consumer Staples Index.The StrataQuant Consumer Staples 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.Cost & Other ExpensesExpense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.With one of the most expensive products in the space, this ETF has annual operating expenses of 0.62%.It's 12-month trailing dividend yield comes in at 2.78%.Sector Exposure and Top HoldingsMost ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.This ETF has heaviest allocation in the Consumer Staples sector - about 87.1% of the portfolio. Healthcare and Materials round out the top three.Looking at individual holdings, Bunge Global S.a. (BG) accounts for about 4.74% of total assets, followed by Mckesson Corporation (MCK) and Molson Coors Beverage Company (TAP).FXG's top 10 holdings account for about 40.26% of its total assets under management.Performance and RiskThe ETF has lost about -2.03% so far this year and is down about -7.74% in the last one year (as of 11/11/2025). In the past 52-week period, it has traded between $60.57 and $70.06The ETF has a beta of 0.56 and standard deviation of 12.20% for the trailing three-year period, making it a medium risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers .AlternativesFirst Trust Consumer Staples AlphaDEX ETF is a reasonable option for investors seeking to outperform the Consumer Staples ETFs segment of the market. However, there are other ETFs in the space which investors could consider.Vanguard Consumer Staples ETF (VDC) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR ETF (XLP) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $7.06 billion in assets, Consumer Staples Select Sector SPDR ETF has $15.05 billion. VDC has an expense ratio of 0.09% and XLP changes 0.08%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Staples ETFsBottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Trust Consumer Staples AlphaDEX ETF (FXG): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks