Should You Invest in the First Trust Consumer Staples AlphaDEX ETF (FXG)?

If you're interested in broad exposure to the Consumer Staples - Broad segment of the equity market, look no further than the First Trust Consumer Staples AlphaDEX ETF (FXG), a passively managed exchange traded fund launched on 05/08/2007.Passively 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.Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.Index DetailsThe fund is sponsored by First Trust Advisors. It has amassed assets over $284.35 million, making it one of the average sized ETFs attempting to match the performance of the Consumer Staples - Broad segment of the equity market. FXG seeks to match the performance of the StrataQuant Consumer Staples Index before fees and expenses.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.CostsWhen 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 0.62%, making it one of the most expensive products in the space.It has a 12-month trailing dividend yield of 1.94%.Sector Exposure and Top HoldingsWhile ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Consumer Staples sector--about 85.30% of the portfolio, followed by Healthcare.Looking at individual holdings, Cvs Health Corporation (CVS) accounts for about 6.16% of total assets, followed by Pilgrim's Pride Corporation (PPC) and Molson Coors Beverage Company (TAP).The top 10 holdings account for about 42.42% of total assets under management.Performance and RiskThe ETF return is roughly 1.24% and is up about 0.14% so far this year and in the past one year (as of 05/05/2025), respectively. FXG has traded between $61.21 and $70.06 during this last 52-week period.The ETF has a beta of 0.61 and standard deviation of 13.66% 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 sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FXG, then, is not the best option for investors seeking exposure to the Consumer Staples ETFs segment of the market. Instead, there are better ETFs in the space to 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 $7.50 billion in assets, Consumer Staples Select Sector SPDR ETF has $16.01 billion. VDC has an expense ratio of 0.09% and XLP charges 0.08%.Bottom 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>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 Reports CVS Health Corporation (CVS): Free Stock Analysis Report Molson Coors Beverage Company (TAP): Free Stock Analysis Report Pilgrim's Pride Corporation (PPC): Free Stock Analysis Report Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports Vanguard Consumer Staples ETF (VDC): 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