4 Unlikely ETFs Hit 52-Week Highs — The Market's Just Catching On To What They Know

Emerging ETF Trends: Four under-the-radar ETFs have reached new 52-week highs by employing smart-beta strategies that focus on alternative indexing techniques, allowing them to navigate market volatility and changing economic conditions effectively.

Specific ETF Highlights: The ETFs include BOXX, which offers low-risk yield; FXU, benefiting from strong utility demand; FAD, focusing on multi-cap growth; and SPRX, targeting disruptive tech sectors like AI and semiconductors, all showcasing diverse investment approaches.

Overview of First Trust Multi Cap Growth AlphaDEX ETF: Launched in 2007, the FAD ETF aims to provide broad exposure to the All Cap Growth category using a smart beta strategy that selects stocks based on fundamental characteristics rather than market capitalization. It has approximately $204.85 million in assets and an expense ratio of 0.64%.

Performance and Alternatives: The ETF has shown a year-to-date gain of about 10.63% and is considered a medium-risk investment with 672 holdings. Investors may also explore alternatives like iShares Morningstar Growth ETF and iShares Core S&P U.S. Growth ETF, which offer lower expense ratios and aim to match market returns.

Overview of First Trust Multi Cap Growth AlphaDEX ETF: Launched in 2007, the FAD ETF aims to provide broad exposure to the All Cap Growth category using a smart beta strategy that selects stocks based on fundamental characteristics rather than market capitalization. It has approximately $204.85 million in assets and an expense ratio of 0.64%.

Performance and Comparison with Other ETFs: The FAD ETF has gained about 10.63% this year and 18.30% over the past year, with a medium risk profile. Investors may also consider lower-cost alternatives like iShares Morningstar Growth ETF and iShares Core S&P U.S. Growth ETF, which have significantly larger asset bases and lower expense ratios.

Introduction to Smart Beta ETFs:

• Smart beta exchange-traded funds (ETFs) like First Trust Multi Cap Growth AlphaDEX ETF (FAD) offer investors exposure to non-cap weighted strategies for stock selection.
• These ETFs aim to beat the market by choosing stocks based on certain fundamental characteristics or a mix of such characteristics.

Fund Details and Index:

• FAD is managed by First Trust Advisors and seeks to match the performance of the Nasdaq AlphaDEX Multi Cap Growth Index.
• The index selects stocks from the NASDAQ US 500 Large Cap Index, NASDAQ US 600 Mid Cap Index, and NASDAQ US 700 Small Cap Index.

Cost and Expenses:

• FAD has an annual operating expense ratio of 0.64%, which is comparable to similar products in the market.
• Expense ratios are crucial in evaluating ETFs as cheaper funds can outperform expensive ones in the long term.

Sector Exposure and Top Holdings:

• FAD has significant exposure to the Industrials sector, with top holdings including Super Micro Computer, Inc., Nvidia Corporation, and Deckers Outdoor Corporation.
• The top 10 holdings make up around 6.57% of FAD's total assets under management.

Performance and Alternatives:

• Year-to-date, FAD has gained approximately 8.71% and is up about 20.89% over the last 12 months.
• Investors seeking alternatives may consider ETFs like iShares Morningstar Growth ETF (ILCG) and iShares Core S&P U.S. Growth ETF (IUSG) for different investment objectives.