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

The First Trust Large Cap Value AlphaDEX ETF (FTA) was launched on 05/08/2007, and is a passively managed exchange traded fund designed to offer 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 $1.18 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 ValueCompanies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.CostsInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.97%.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 to the Financials sector--about 21.20% of the portfolio. Energy and Industrials round out the top three.Looking at individual holdings, United Airlines Holdings, Inc. (UAL) accounts for about 1.57% of total assets, followed by Synchrony Financial (SYF) and Delta Air Lines, Inc. (DAL).The top 10 holdings account for about 10.92% 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 has added roughly 2.57% so far this year and was up about 13.61% in the last one year (as of 02/05/2025). In the past 52-week period, it has traded between $69.68 and $83.49.The ETF has a beta of 1.08 and standard deviation of 16.81% 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 $67.37 billion in assets, Vanguard Value ETF has $133.63 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.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 Large Cap Value AlphaDEX ETF (FTA): ETF Research Reports Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Airlines Holdings Inc (UAL): Free Stock Analysis Report Synchrony Financial (SYF): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks