Is First Trust Large Cap Value AlphaDEX ETF (FTA) a Strong ETF Right Now?

The First Trust Large Cap Value AlphaDEX ETF (FTA), a smart beta fund with $1.13 billion in AUM, aims to outperform the large-cap value segment through an enhanced stock selection methodology, delivering a 12.37% return year-to-date and over the past year (as of 07/09/2025) with a medium risk profile (beta 0.90). However, its 0.58% annual expense ratio is significantly higher than larger, market-cap weighted alternatives like SCHD (0.06%) and VTV (0.04%), positioning FTA as a premium-cost option within the value ETF landscape.

Analysis

The First Trust Large Cap Value AlphaDEX ETF (FTA) is a smart beta fund with $1.13 billion in assets, offering exposure to the large-cap value market through a proprietary, non-market-cap weighted methodology. The fund has delivered strong recent performance, with a year-to-date and one-year return of 12.37% as of July 9, 2025. Its risk profile is characterized as medium, with a beta of 0.90 indicating slightly lower volatility than the broader market, and it maintains good diversification with 188 holdings, a 24.1% concentration in Financials, and only 10.76% of assets in its top 10 positions. The primary drawback is its significant cost; the 0.58% annual expense ratio is substantially higher than passively managed alternatives like the Schwab U.S. Dividend Equity ETF (SCHD) at 0.06% and the Vanguard Value ETF (VTV) at 0.04%. This cost differential creates a high hurdle for FTA, requiring its AlphaDEX strategy to consistently generate alpha to justify the premium fee structure when compared to its low-cost peers.

Key Decisions for Investors

• Investors who believe the AlphaDEX methodology can continue to outperform and are willing to pay a premium for a rules-based active strategy might consider FTA given its strong recent performance.
• Cost-sensitive investors should carefully weigh the fund's high 0.58% expense ratio, as this fee will act as a significant drag on long-term returns compared to much cheaper, market-cap weighted alternatives like VTV and SCHD.
• Potential and current shareholders should monitor FTA's performance net of fees against its low-cost peers over a full market cycle to validate whether its smart beta strategy consistently justifies its premium expense.