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Should First Trust Mid Cap Core AlphaDEX ETF (FNX) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the First Trust Mid Cap Core AlphaDEX ETF (FNX - Free Report) is a passively managed exchange traded fund launched on 05/08/2007.
The fund is sponsored by First Trust Advisors. It has amassed assets over $985.66 million, making it one of the average sized ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus they have a nice balance of growth potential and stability.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.62%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 1.12%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 18.30% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Universal Health Services, Inc. (class B) (UHS - Free Report) accounts for about 0.54% of total assets, followed by Pvh Corp. (PVH - Free Report) and Amkor Technology, Inc. (AMKR - Free Report) .
The top 10 holdings account for about 4.73% of total assets under management.
Performance and Risk
FNX seeks to match the performance of the Nasdaq AlphaDEX Mid Cap Core Index before fees and expenses. The NASDAQ AlphaDEX Mid Cap Core Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 600 Mid Cap Index.
The ETF has added about 5.57% so far this year and is down about -8.24% in the last one year (as of 01/12/2023). In the past 52-week period, it has traded between $80.01 and $101.85.
The ETF has a beta of 1.19 and standard deviation of 30.46% for the trailing three-year period, making it a medium risk choice in the space. With about 451 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Mid Cap Core AlphaDEX ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FNX is a good option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap ETF (VO - Free Report) and the iShares Core S&P MidCap ETF (IJH - Free Report) track a similar index. While Vanguard MidCap ETF has $51.96 billion in assets, iShares Core S&P MidCap ETF has $66.61 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 Core AlphaDEX ETF (FNX) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the First Trust Mid Cap Core AlphaDEX ETF (FNX - Free Report) is a passively managed exchange traded fund launched on 05/08/2007.
The fund is sponsored by First Trust Advisors. It has amassed assets over $985.66 million, making it one of the average sized ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus they have a nice balance of growth potential and stability.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.62%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 1.12%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 18.30% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Universal Health Services, Inc. (class B) (UHS - Free Report) accounts for about 0.54% of total assets, followed by Pvh Corp. (PVH - Free Report) and Amkor Technology, Inc. (AMKR - Free Report) .
The top 10 holdings account for about 4.73% of total assets under management.
Performance and Risk
FNX seeks to match the performance of the Nasdaq AlphaDEX Mid Cap Core Index before fees and expenses. The NASDAQ AlphaDEX Mid Cap Core Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 600 Mid Cap Index.
The ETF has added about 5.57% so far this year and is down about -8.24% in the last one year (as of 01/12/2023). In the past 52-week period, it has traded between $80.01 and $101.85.
The ETF has a beta of 1.19 and standard deviation of 30.46% for the trailing three-year period, making it a medium risk choice in the space. With about 451 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Mid Cap Core AlphaDEX ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FNX is a good option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap ETF (VO - Free Report) and the iShares Core S&P MidCap ETF (IJH - Free Report) track a similar index. While Vanguard MidCap ETF has $51.96 billion in assets, iShares Core S&P MidCap ETF has $66.61 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.