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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 $1.06 billion, 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, 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 they have a nice balance of growth potential and stability.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.59%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0.94%.
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 19.50% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Avis Budget Group, Inc. (CAR - Free Report) accounts for about 0.48% of total assets, followed by Apa Corporation (APA - Free Report) and Ovintiv Inc. (OVV - Free Report) .
The top 10 holdings account for about 4.21% 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 roughly 26.69% so far this year and was up about 24.76% in the last one year (as of 12/31/2021). In the past 52-week period, it has traded between $81.91 and $107.11.
The ETF has a beta of 1.27 and standard deviation of 27.85% for the trailing three-year period, making it a medium risk choice in the space. With about 452 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 $56.78 billion in assets, iShares Core S&P MidCap ETF has $68.21 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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 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 $1.06 billion, 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, 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 they have a nice balance of growth potential and stability.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.59%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0.94%.
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 19.50% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Avis Budget Group, Inc. (CAR - Free Report) accounts for about 0.48% of total assets, followed by Apa Corporation (APA - Free Report) and Ovintiv Inc. (OVV - Free Report) .
The top 10 holdings account for about 4.21% 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 roughly 26.69% so far this year and was up about 24.76% in the last one year (as of 12/31/2021). In the past 52-week period, it has traded between $81.91 and $107.11.
The ETF has a beta of 1.27 and standard deviation of 27.85% for the trailing three-year period, making it a medium risk choice in the space. With about 452 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 $56.78 billion in assets, iShares Core S&P MidCap ETF has $68.21 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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.