The First Trust Large Cap Growth AlphaDEX ETF (FTC) is a smart beta ETF focused on the Large Cap Growth sector. Unlike traditional ETFs that follow market cap-weighted indexes, smart beta ETFs use specific stock selection strategies to enhance their risk-return profile. FTC, managed by First Trust Advisors, aims to match the performance of the Nasdaq AlphaDEX Large Cap Growth Index. With over $1.27 billion in assets, it’s considered an average-sized fund in its category. The ETF charges an expense ratio of 0.58% per year, which is higher than some rivals.

Sector Allocation and Top Holdings

The fund invests 26.3% in Information Technology, with significant portions also in Industrials and Consumer Discretionary. Its top holdings include Coherent Corp., Alphabet Inc., and Vertiv Holdings Co. These top 10 positions make up about 10.95% of the fund’s assets. FTC has gained 1.29% this year and 16.96% over the last year, through early January 2026. It has traded between $116.97 and $164.79 in the past 52 weeks. With a beta of 1.13 and a standard deviation of 17.66%, it is considered medium risk. Other options in this space, like the Vanguard Growth ETF and Invesco QQQ, offer different risks and costs. With a beta of 1.13, this ETF is a bit more volatile than the overall market, which can be beneficial for options traders. Throughout the fourth quarter of 2025, the VIX hovered around 14, keeping options premiums reasonable. This could be a good time to open new positions. The fund’s smart beta approach may lead it to differ from passive indexes, creating special trading opportunities based on its unique stock selection process. The current economic environment seems to favor growth funds like FTC. The Federal Reserve kept interest rates steady throughout 2025, and recent meeting minutes suggested a possible rate cut later in 2026, which could benefit technology and growth sectors. A brief rally occurred in the last weeks of last year following this news, and encouraging inflation reports could further boost this trend.

Considering Market Conditions

Nonetheless, we should note the fund’s heavy focus on Industrials and Consumer Discretionary sectors, which might face short-term challenges. The ISM Manufacturing PMI for December 2025 recorded at 49.1, suggesting a slight contraction in the industrial sector. Additionally, the National Retail Federation reported a 3.6% growth in holiday sales for 2025, indicating that consumer spending may be slowing. Looking back at 2025, FTC’s performance was solid but lagged behind the NASDAQ-100. The QQQ index rose over 22% in 2025, mainly due to a few large tech stocks that dominate its market-cap-weighted index. This scenario presents a potential trading strategy, where investors could speculate on whether the performance gap between FTC and QQQ will narrow or widen in the next few weeks. The fund’s diverse nature, with its top 10 holdings only representing about 11% of its assets, minimizes the impact of any single stock’s earnings report. As earnings season for the fourth quarter of 2025 approaches, traders should keep an eye on the implied volatility of options on FTC. This could provide a cost-effective way to gauge overall sentiment in the large-cap growth sector without taking the concentrated risk of individual stocks like Alphabet. Create your live VT Markets account and start trading now.

<Click here to set up a live account on VT Markets now