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Is First Trust Mid Cap Growth AlphaDEX ETF (FNY) a Strong ETF Right Now?
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Launched on 04/19/2011, the First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FNY has been able to amass assets over $256.62 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. FNY seeks to match the performance of the Nasdaq AlphaDEX Mid Cap Growth Index before fees and expenses.
The NASDAQ AlphaDEX Mid Cap Growth Index is an enhanced which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 600 Mid Cap Growth Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.77% for FNY, making it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.22%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 20.70% of the portfolio, the fund has heaviest allocation to the Industrials sector; Consumer Discretionary and Healthcare round out the top three.
Taking into account individual holdings, Valaris Limited (VAL - Free Report) accounts for about 0.95% of the fund's total assets, followed by Murphy Oil Corporation (MUR - Free Report) and Valmont Industries, Inc. (VMI - Free Report) .
FNY's top 10 holdings account for about 8.46% of its total assets under management.
Performance and Risk
So far this year, FNY has added about 5.82%, and is down about -14.11% in the last one year (as of 01/16/2023). During this past 52-week period, the fund has traded between $52.58 and $68.83.
FNY has a beta of 1.12 and standard deviation of 29.50% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 226 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Mid Cap Growth AlphaDEX ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard MidCap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell MidCap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard MidCap Growth ETF has $9.85 billion in assets, iShares Russell MidCap Growth ETF has $12.33 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is First Trust Mid Cap Growth AlphaDEX ETF (FNY) a Strong ETF Right Now?
Launched on 04/19/2011, the First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FNY has been able to amass assets over $256.62 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. FNY seeks to match the performance of the Nasdaq AlphaDEX Mid Cap Growth Index before fees and expenses.
The NASDAQ AlphaDEX Mid Cap Growth Index is an enhanced which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 600 Mid Cap Growth Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.77% for FNY, making it one of the most expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.22%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 20.70% of the portfolio, the fund has heaviest allocation to the Industrials sector; Consumer Discretionary and Healthcare round out the top three.
Taking into account individual holdings, Valaris Limited (VAL - Free Report) accounts for about 0.95% of the fund's total assets, followed by Murphy Oil Corporation (MUR - Free Report) and Valmont Industries, Inc. (VMI - Free Report) .
FNY's top 10 holdings account for about 8.46% of its total assets under management.
Performance and Risk
So far this year, FNY has added about 5.82%, and is down about -14.11% in the last one year (as of 01/16/2023). During this past 52-week period, the fund has traded between $52.58 and $68.83.
FNY has a beta of 1.12 and standard deviation of 29.50% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 226 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Mid Cap Growth AlphaDEX ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard MidCap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell MidCap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard MidCap Growth ETF has $9.85 billion in assets, iShares Russell MidCap Growth ETF has $12.33 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.