Is First Trust Large Cap Growth AlphaDEX ETF (FTC) a Strong ETF Right Now?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
FTC is managed by First Trust Advisors, and this fund has amassed over $1.19 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Growth. FTC seeks to match the performance of the Nasdaq AlphaDEX Large Cap Growth Index before fees and expenses.
The NASDAQ AlphaDEX Large Cap Growth Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 500 Large Cap Growth Index.
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.58% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.35%.
Most 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 Financials sector - about 20.8% of the portfolio. Information Technology and Industrials round out the top three.
When you look at individual holdings, Robinhood Markets, Inc. (class A) (HOOD) accounts for about 1.47% of the fund's total assets, followed by Roblox Corporation (class A) (RBLX) and Carvana Co. (class A) (CVNA).
Its top 10 holdings account for approximately 11.91% of FTC's total assets under management.
So far this year, FTC return is roughly 8.83%, and was up about 23.09% in the last one year (as of 07/03/2025). During this past 52-week period, the fund has traded between $115.51 and $150.97.
FTC has a beta of 1.11 and standard deviation of 18.68% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 188 holdings, it effectively diversifies company-specific risk .
First Trust Large Cap Growth AlphaDEX ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Growth ETF (VUG) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Growth ETF has $173.93 billion in assets, Invesco QQQ has $353.41 billion. VUG has an expense ratio of 0.04% and QQQ changes 0.20%.
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 Growth
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.
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 Growth AlphaDEX ETF (FTC): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
4 hours ago
- Yahoo
CPER Sinks as China, Dollar Tariffs Weigh on Copper
The United States Copper Index Fund (CPER), a popular way for investors to gain exposure to the industrial metal, finds itself down from a range of negative forces, as the exchange-traded fund sank more than 2% in Monday afternoon trading. This recent dip in spot copper prices, which began July 3, comes after a period of robust performance, leaving many to wonder about the immediate future for the bellwether commodity. The current weakness in copper can be attributed to a confluence of factors, including resurfacing trade tensions, a notable buildup in inventories and a softening of short-term demand. Several immediate catalysts are contributing to the recent downtrend in copper prices, weighing on the CPER ETF, which tracks copper futures contracts and provides convenient access to the metal's price movements. Renewed tariff tensions and heightened trade policy uncertainty are casting a long shadow. Reports suggest that the looming prospect of U.S. tariffs, with deadlines approaching, is causing industrial players to exercise caution, potentially leading to reduced inventory accumulation and a deferral of capital expenditures. This "wait-and-see" approach translates directly into a temporary slowdown in demand for copper. There's been a noticeable increase in global copper inventories, particularly at major Chinese ports. Data indicate a substantial week-over-week rise in nationwide copper inventories in early July. When supply in warehouses grows significantly faster than immediate consumption, it naturally puts downward pressure on prices, regardless of long-term fundamentals. This inventory buildup reflects not only increased import volumes but also a weakening in short-term consumption. While the U.S. dollar has weakened in 2025, it's inched 1% higher since July 3, as copper is primarily traded in U.S. dollars on global markets and a stronger dollar makes the commodity more expensive for international buyers using other currencies. This effectively dampens global demand, contributing to price declines. Recent U.S. economic data, such as robust employment reports, can bolster the dollar, inadvertently putting pressure on dollar-denominated commodities like copper. Despite the current short-term headwinds, the long-term outlook for copper remains overwhelmingly bullish, driven by powerful structural trends. The most significant factor is the global energy transition. Copper is an indispensable component in nearly all green technologies, from electric vehicles (EVs), which use significantly more copper than traditional internal combustion engine vehicles, to renewable energy infrastructure like solar panels and wind turbines. The vast expansion of electrical grids, necessary to support increased electrification and intermittent renewable energy sources, also demands colossal amounts of copper. Furthermore, the burgeoning demand from data centers to power artificial intelligence infrastructure represents another rapidly growing area of copper consumption. Beyond demand, the supply side faces inherent constraints. Developing new copper mines is a capital-intensive, time-consuming process, with lead times from discovery to production often stretching well over a decade. The recent decline in spot copper prices, reflected in ETFs like CPER, highlights the inherent volatility of commodity markets. While immediate factors such as trade uncertainty, inventory surges and seasonal demand weakness are influencing the current pullback, investors should remember that the industrial metal is also supported by powerful, long-term secular growth drivers. As with any metal or commodity investment, understanding both the short-term catalysts and the long-term fundamentals while recognizing the speculative nature of spot prices is crucial for making informed investment decisions. Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in ETFs involves risks, and investors should carefully consider their investment objectives and risk tolerance before making any investment decisions. At the time of publication, Kent Thune did not hold a position in any of the aforementioned | © Copyright 2025 All rights reserved
Yahoo
4 hours ago
- Yahoo
Vanguard Plans First Junk ETF
Vanguard Group is planning to launch the Vanguard High-Yield Active ETF (ticker: VGHY) and invest at least 80% of its portfolio in high-yield debt. Katie Greifeld and Eric Balchunas have more on the story. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
6 hours ago
- Bloomberg
Global X CEO on Product Lineup (SHLD, AIQ, BOTZ, GXIG)
Global X CEO Ryan O'Connor discusses the Global X Defense Tech ETF (ticker: SHLD) which is currently up 58% this year. He also discusses the Artificial Intelligence & Technology ETF (ticker: AIQ), Robotics & Artificial Intelligence ETF (ticker: BOTZ), and the Investment Grade Corporate Bond ETF (ticker: GXIG). (Source: Bloomberg)
