Should First Trust Large Cap Value AlphaDEX ETF (FTA) Be on Your Investing Radar?

Launched on May 8, 2007, the First Trust Large Cap Value AlphaDEX ETF (FTA) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.The fund is sponsored by First Trust Advisors. It has amassed assets over $1.14 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.Why Large Cap ValueLarge cap companies usually 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.Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets. CostsExpense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.Annual operating expenses for this ETF are 0.58%, making it one of the more expensive products in the space.It has a 12-month trailing dividend yield of 1.88%.Sector Exposure and Top HoldingsIt is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Financials sector -- about 19.8% of the portfolio. Healthcare and Industrials round out the top three.Looking at individual holdings, D.r. Horton, Inc. (DHI) accounts for about 1.19% of total assets, followed by Newmont Corporation (NEM) and Pultegroup, Inc. (PHM).The top 10 holdings account for about 10.56% of total assets under management.Performance and RiskFTA seeks to match the performance of the Nasdaq AlphaDEX Large Cap Value Index before fees and expenses. The NASDAQ AlphaDEX Large Cap Value Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 500 Large Cap Value Index.The ETF return is roughly 9.58% so far this year and it's up approximately 5.39% in the last one year (as of 10/15/2025). In the past 52-week period, it has traded between $67.12 and $84.51.The ETF has a beta of 0.91 and standard deviation of 15.81% for the trailing three-year period, making it a medium risk choice in the space. With about 188 holdings, it effectively diversifies company-specific risk.AlternativesFirst Trust Large Cap Value 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, FTA is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $69.86 billion in assets, Vanguard Value ETF has $148.70 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.Bottom-LinePassively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.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 Large Cap Value AlphaDEX ETF (FTA): 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