FXN ETF: What Is It? A Complete Guide to Returns, Expense Ratio, Holdings, and Alternative ETFs
A smart beta ETF for the US energy sector built on the AlphaDEX quantitative model. It selects stocks based on fundamental metrics to pursue efficient weight allocation within the sector.
SubscribeWhat Is This ETF?
This fund tracks Nasdaq's StrataQuant Energy Index. From the energy sector stocks in the Russell 1000 Index, it analyzes a range of metrics, including sales growth, price momentum, and return on assets (ROA), and reflects the results in portfolio construction.
It suits investors who want energy sector exposure with less concentration in a few large caps and the benefit of strategic stock selection.
Launched by First Trust in 2007, it is a passively managed ETF that tracks an index.
How Does It Invest?
| Item | Details |
|---|---|
| Tracked Index | StrataQuant Energy Index |
| Management Style | Smart beta (quantitative model) |
| Rebalancing Frequency | Quarterly |
| Dividend Frequency | Quarterly |
| Total Expense Ratio | 0.63% |
Energy companies are scored on growth and value factors, and the top-ranked stocks are selected. The selected stocks are grouped by score rank, and within each group they are equally weighted, creating a tiered structure.
- Stock selection based on the proprietary AlphaDEX quantitative model
- Addresses the limits of market-cap weighting, which skews toward large oil majors
Size and Costs
Assets under management (AUM) stand at $401.1M, and the Expense Ratio is 0.63% per year.
Unlike traditional sector ETFs such as XLE and VDE shown in the table, which carry heavy weightings in a handful of giant companies, this fund invests more evenly across a wider range of companies, including mid caps, to capture opportunities across the sector.
Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeThe fund shows high volatility in line with the energy industry cycle, and its returns are particularly sensitive to the direction of crude oil and natural gas prices and to the strength of earnings improvement at energy companies.
Amid energy security concerns and supply chain realignment, investment demand for the sector as a whole continues, and capital seeking alpha through efficient stock selection is flowing in.
Strengths and Weaknesses
The quantitative model screens for quality stocks within the energy sector, but investors must accept a relatively high expense ratio and the large volatility typical of the sector.
💪 Key Strengths
⚠️ Points to Watch
Alternative ETFs and Related Products
IYE in the table is a standard choice covering the US energy market broadly, while EIPI is a variant focused on income. If you want exposure specialized in oil drilling and exploration, you can consider XOP, and if you want to focus on services and equipment, OIH is an alternative. IXC, which widens the scope to global energy companies, is also a key comparison.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 XLE | State Street Energy Select Sector SPDR ETF | $70.02 | +1.9% | $45.3B | 0.08% | 2.18% | +60.1% |
 VDE | Vanguard Energy ETF | $195.46 | +1.8% | $11.6B | 0.09% | 2.09% | +57.8% |
 FENY | Fidelity MSCI Energy Index ETF | $38.48 | +1.9% | $2.3B | 0.08% | 2.05% | +58.2% |
 IYE | iShares U.S. Energy ETF | $73.81 | +2.0% | $1.8B | 0.37% | 1.83% | +58.8% |
 EIPI | FT Energy Income Partners Enhanced Income ETF | $23.00 | +0.2% | $1.1B | 1.11% | 6.52% | +17.3% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
 DINO | HF Sinclair Corp | 0.06% | $115.00 | +2.8% | $19.7B | 5.8 | 1.79% |
 APA | APA Corp | 0.10% | $52.82 | +2.5% | $18.5B | 11.2 | 1.91% |
 OVV | Ovintiv Inc | 0.05% | $72.62 | +1.5% | $20.0B | 20.3 | 1.66% |
| DVN | Devon Energy Corp | 0.10% | $52.15 | +1.9% | $57.4B | 12.3 | 2.21% |
 PR | Permian Resources Holdings Inc | 0.05% | $26.02 | +1.8% | $21.8B | 17.3 | 2.46% |
 MTDR | Matador Resources Co | 0.05% | $60.88 | +1.8% | $7.5B | 10.5 | 2.52% |
 RRC | Range Resources Corp | 0.05% | $54.63 | +1.4% | $12.8B | 14.5 | 0.71% |
| LNG | Cheniere Energy Inc | 0.05% | $330.32 | +3.6% | $68.2B | 23.0 | 0.7% |
Investor Checkpoints
The energy sector is highly sensitive to macroeconomic and geopolitical variables. It is important to understand how a smart beta strategy performs in such an environment.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 💵 Expense Ratio | Whether costs are reasonable given the quantitative model | Somewhat high |
| 📊 Stock Diversification | Concentration in top holdings and allocation within the sector | Balanced |
| 🔄 Rebalancing | Quarterly portfolio adjustment schedule | Executed regularly |
| 🛢️ Commodity Exposure | Sensitivity to oil and gas prices | Very high |
Even when individual companies have strong fundamentals, it is hard to fully escape downward pressure on the whole sector when energy commodity prices plunge. Investors should always keep this in mind, as it can have a decisive effect on investment results.
It is a useful tool for investors who want to reduce the skew of market-cap weighting and pursue strategic stock selection within the energy sector. However, a long-term approach that takes into account the higher fee and sector volatility is needed.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
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