Should First Trust Small Cap Core AlphaDEX ETF (FYX) Be on Your Investing Radar?

The First Trust Small Cap Core AlphaDEX ETF (FYX) was launched on May 8, 2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.

The fund is sponsored by First Trust Advisors. It has amassed assets over $1.42 billion, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.

Why Small Cap Blend

Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.

Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

Costs

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

Annual operating expenses for this ETF are 0.58%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.87%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector -- about 21.2% of the portfolio. Industrials and Healthcare round out the top three.

Looking at individual holdings, Par Pacific Holdings, Inc. (PARR) accounts for about 0.4% of total assets, followed by Dorian Lpg Ltd. (LPG) and Pbf Energy Inc. (PBF).

The top 10 holdings account for about 3.66% of total assets under management.

Performance and Risk

FYX seeks to match the performance of the Nasdaq AlphaDEX Small Cap Core Index before fees and expenses. 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.

The ETF has added roughly 30.2% so far this year and it's up approximately 50.01% in the last one year (as of 08/05/2026). In the past 52-week period, it has traded between $99.43 and $146.67.

The ETF has a beta of 1.06 and standard deviation of 20.21% for the trailing three-year period, making it a medium risk choice in the space. With about 526 holdings, it effectively diversifies company-specific risk.

Alternatives

First Trust Small Cap Core 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, FYX is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell 2000 ETF (IWM) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $83.15 billion in assets, iShares Core S&P Small-Cap ETF has $113.54 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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.

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

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