ETF Spotlight: First Trust Industrial/Producer Durable AlphaDEX (FXR)

April 21st at 2:00pm by Tom Lydon

ETF Spotlight on First Trust Industrial/Producer Durable AlphaDEX (NYSEArca: FXR), part of a weekly series. Assets: $29.2 million

Objective: Tracks the StrataQuant Industrials Index, an index developed and maintained by the NYSE Euronext.

Holdings: Top holdings include Xerox (NYSE: XRX), Southwest Airlines (NYSE: LUV), Boeing (NYSE: BA), Delta Airline (NYSE: DAL) and Raytheon (NYSE: RTN).

What You Should Know

  • The index ranks stocks in the Russell 1000 on growth factors including three, six and 12-month price appreciation, sales to price and one-year sales growth, as well as other value factors. [Manufacturing Has a Ripple Effect.]
  • The bottom 25% are then eliminated and the rest are selected for the index, then divided into quantiles based on their rankings. The higher-ranked quantiles get the greatest weightings, but stocks are equally weighted within each quantile.
  • The fund’s expense ratio is 1.08%, has 92 holdings and it rebalances quarterly.
  • FXR is heaviest in mid-cap companies, which have 58.7% of the total weighting; large-caps make up another 23.1%.

The Latest News

  • Manufacturing surged to 59.6 last month; any number above 50 is a sign of expansion. The growth is the fastest pace since July 2004. The increase is being attributed to improving demand in the United States and Asia and a need for businesses to begin the work of rebuilding depleted inventories.
  • Industrials are a good value right now, something investors will find appealing in this recovery. [Industrial ETFs Hot and Getting Hotter.]
  • Industrial companies are feeling positive, and many of them are raising their dividends. Around 10 industrial companies raised their dividends for the month of February.

Visit our ETF Spotlight page to read past features.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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