Is first trust small cap core AlphaDEX ETF (FYX) a strong ETF right now?

The First Trust Small Cap Core AlphaDEX ETF (FYX - Free Report) made its debut on 05/08/2007, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small Cap Blend category of the market.

What are smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

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.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

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.

Fund sponsor and index

The fund is sponsored by First Trust Advisors. It has amassed assets over $971.03 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the Nasdaq AlphaDEX Small Cap Core Index.

The NASDAQ AlphaDEX Small Cap Core Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 700 Small Cap Index.

Cost and other expenses

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

Operating expenses on an annual basis are 0.58% for this ETF, which makes it on par with most peer products in the space.

FYX's 12-month trailing dividend yield is 0.61%.

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.

For FYX, it has heaviest allocation in the Financials sector --about 18.5% of the portfolio --while Industrials and Healthcare round out the top three.

Taking into account individual holdings, Praxis Precision Medicines, Inc. (PRAX) accounts for about 0.86% of the fund's total assets, followed by Globalstar, Inc. (GSAT) and Arrowhead Pharmaceuticals, Inc. (ARWR).

Its top 10 holdings account for approximately 5.14% of FYX's total assets under management.

Performance and risk

The ETF has added roughly 4.25% so far this year and was up about 16.7% in the last one year (as of 01/07/2026). In the past 52-week period, it has traded between $79.22 and $117.95

The ETF has a beta of 1.07 and standard deviation of 21.06% for the trailing three-year period, making it a medium risk choice in the space. With about 525 holdings, it effectively diversifies company-specific risk .

Alternatives

First Trust Small Cap Core AlphaDEX ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.

iShares Russell 2000 ETF (IWM) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR) tracks S&P SmallCap 600 Index. iShares Russell 2000 ETF has $76.57 billion in assets, iShares Core S&P Small-Cap ETF has $91.26 billion. IWM has an expense ratio of 0.19% and IJR changes 0.06%.