ETF Research and Analysis

by Robert Goldsborough
First Trust Consumer Staples AlphaDEX FXG is a strategic beta exchange-traded fund offering exposure to the U.S. consumer staples sector. This defensive sector often produces relative outperformance during recessions and,  Read more 

Bull Case

Companies held in this fund generally have stable revenue growth and cash flows.
One use for consumer staples firms' excess cash will be for smaller, bolt-on deals, which we view positively as they would offer potential acquirers the opportunity to get a better handle on the local consumer without becoming steeply indebted.
This ETF offers much more of a mid-cap tilt than do other consumer staples ETFs. As such, it provides purer exposure to the U.S. consumer staples sector than do some of its peers, whose holdings include large mass retailers and conglomerates with meaningful overseas businesses. Read more 

Bear Case

The retailers held in this ETF operate in very competitive environments that can make margin expansion difficult.
A stronger dollar is hurting some of the firms held in this ETF that have significant foreign revenue.
This ETF's expense ratio is higher than those of some other consumer-focused ETFs. Read more 

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