ETF Report: First Trust Materials AlphaDEX Fund (FXZ)

The First Trust Materials AlphaDEX Fund (FXZ) is an ETF that invests in companies within the materials sector. Based on recent data, it has shown strong price growth and provides a modest amount of regular income to its investors.

What this ETF is trying to do

FXZ focuses on the materials industry. This includes companies that find, produce, or process raw materials. According to the Top Holdings list (updated October 12, 2026), the fund invests in companies like Steel Dynamics Inc (5.04%), Aura Minerals Inc (4.97%), and Alcoa Corp (4.82%). The fund holds a total of 41 holdings.

What the numbers show

The fund has seen positive growth across several timeframes:

• Year-to-Date: The price return is 20.08%, while the total return is 21.10%.

• One Year: The price return is 25.39%, and the total return is 27.18%.

• Three Year: The price return is 25.47%, and the total return is 31.55%.

The current price is $77.84. For comparison, the estimated price from roughly one year ago was $62.08.

It is important to note that price return only measures the change in the share price. Total return is a different measure that includes the distributions paid out to investors.

Income and distribution explanation

FXZ pays distributions usually every quarter, with four payments made in the last 12 months. It has a distribution yield of approximately 1.32%.

For new investors, it is important to remember that a distribution yield is not the same as a total return. While these payments provide cash income, they are only one part of the overall return.

NAV erosion explanation

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

However, looking at price-based evidence, the fund has an erosion score of 100, and the erosion label states "No price erosion detected." The severe erosion-risk flag is false.

Pros

• Strong Growth: The fund has shown significant positive price and total returns over the last one and three years.

• Stability: The erosion-risk measurement is rated as "good."

• Income Grade: It has an income rating grade of "A."

Cons

• Sector Specific: Because it focuses only on materials, it may be more volatile than a fund that invests in many different industries.

• Low Yield: The distribution yield is relatively low compared to funds designed specifically for high income.

Beginner takeaway

FXZ is a materials-focused fund that has recently experienced strong price growth. While it provides some quarterly income, its primary recent strength has been the increase in its share price rather than high cash payouts.