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Should First Trust Mid Cap Value AlphaDEX ETF (FNK) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the First Trust Mid Cap Value AlphaDEX ETF (FNK - Free Report) is a passively managed exchange traded fund launched on 04/19/2011.
The fund is sponsored by First Trust Advisors. It has amassed assets over $241.28 million, making it one of the smaller ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.70%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 1.45%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 28% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, The Mosaic Company (MOS - Free Report) accounts for about 0.94% of total assets, followed by Discovery, Inc. (class A) and Huntsman Corporation (HUN - Free Report) .
The top 10 holdings account for about 8.66% of total assets under management.
Performance and Risk
FNK seeks to match the performance of the Nasdaq AlphaDEX Mid Cap Value Index before fees and expenses. The NASDAQ AlphaDEX Mid Cap Value Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 600 Mid Cap Value Index.
The ETF has lost about -0.67% so far this year and is up roughly 10.42% in the last one year (as of 03/29/2022). In the past 52-week period, it has traded between $42.51 and $48.46.
The ETF has a beta of 1.36 and standard deviation of 32.58% for the trailing three-year period, making it a medium risk choice in the space. With about 226 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Mid Cap Value AlphaDEX ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FNK is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell MidCap Value ETF (IWS - Free Report) and the Vanguard MidCap Value ETF (VOE - Free Report) track a similar index. While iShares Russell MidCap Value ETF has $15 billion in assets, Vanguard MidCap Value ETF has $16.91 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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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Should First Trust Mid Cap Value AlphaDEX ETF (FNK) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the First Trust Mid Cap Value AlphaDEX ETF (FNK - Free Report) is a passively managed exchange traded fund launched on 04/19/2011.
The fund is sponsored by First Trust Advisors. It has amassed assets over $241.28 million, making it one of the smaller ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.70%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 1.45%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 28% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, The Mosaic Company (MOS - Free Report) accounts for about 0.94% of total assets, followed by Discovery, Inc. (class A) and Huntsman Corporation (HUN - Free Report) .
The top 10 holdings account for about 8.66% of total assets under management.
Performance and Risk
FNK seeks to match the performance of the Nasdaq AlphaDEX Mid Cap Value Index before fees and expenses. The NASDAQ AlphaDEX Mid Cap Value Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 600 Mid Cap Value Index.
The ETF has lost about -0.67% so far this year and is up roughly 10.42% in the last one year (as of 03/29/2022). In the past 52-week period, it has traded between $42.51 and $48.46.
The ETF has a beta of 1.36 and standard deviation of 32.58% for the trailing three-year period, making it a medium risk choice in the space. With about 226 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Mid Cap Value AlphaDEX ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FNK is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell MidCap Value ETF (IWS - Free Report) and the Vanguard MidCap Value ETF (VOE - Free Report) track a similar index. While iShares Russell MidCap Value ETF has $15 billion in assets, Vanguard MidCap Value ETF has $16.91 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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.