Is First Trust Industrials/Producer Durables AlphaDEX ETF (FXR) a Strong ETF Right Now?

Launched on 05/08/2007, the First Trust Industrials/Producer Durables AlphaDEX ETF (FXR) is a smart beta exchange traded fund offering broad exposure to the Industrials ETFs category of the market.

What Are Smart Beta ETFs?

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.

Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

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 & Index

The fund is managed by First Trust Advisors. FXR has been able to amass assets over $1.88 billion, making it one of the larger ETFs in the Industrials ETFs. This particular fund seeks to match the performance of the StrataQuant Industrials Index before fees and expenses.

The StrataQuant Industrials 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 Expenses

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.

Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 0.67%.

Sector Exposure and Top Holdings

It 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.

Story Continues FXR's heaviest allocation is in the Industrials sector, which is about 70.2% of the portfolio. Its Materials and Financials round out the top three.

When you look at individual holdings, Comfort Systems Usa, Inc. (FIX) accounts for about 1.49% of the fund's total assets, followed by Rocket Lab Corporation (RKLB) and Bwx Technologies, Inc. (BWXT).

Its top 10 holdings account for approximately 13.65% of FXR's total assets under management.

Performance and Risk

Year-to-date, the First Trust Industrials/Producer Durables AlphaDEX ETF has added roughly 6.59% so far, and is up roughly 14.75% over the last 12 months (as of 09/09/2025). FXR has traded between $60.85 $83.27 in this past 52-week period.

The ETF has a beta of 1.16 and standard deviation of 20.25% for the trailing three-year period, making it a medium risk choice in the space. With about 141 holdings, it effectively diversifies company-specific risk .

Alternatives

First Trust Industrials/Producer Durables AlphaDEX ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $6.11 billion in assets, Industrial Select Sector SPDR ETF has $23.17 billion. VIS has an expense ratio of 0.09% and XLI 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 Industrials ETFs

Bottom Line

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.

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First Trust Industrials/Producer Durables AlphaDEX ETF (FXR): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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