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Is First Trust Mid Cap Growth AlphaDEX ETF (FNY) a Strong ETF Right Now?
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A smart beta exchange traded fund, the First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report) debuted on 04/19/2011, and offers 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $321.20 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, FNY seeks to match the performance of the Nasdaq AlphaDEX Mid Cap Growth Index.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.70% for FNY, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 0%.
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.
For FNY, it has heaviest allocation in the Healthcare sector --about 19% of the portfolio --while Information Technology and Industrials round out the top three.
Looking at individual holdings, Avis Budget Group, Inc, (CAR - Free Report) accounts for about 1.31% of total assets, followed by Apa Corporation (APA - Free Report) and Synaptics Incorporated (SYNA - Free Report) .
FNY's top 10 holdings account for about 9.3% of its total assets under management.
Performance and Risk
The ETF has lost about -11.56% and is down about -4.57% so far this year and in the past one year (as of 02/28/2022), respectively. FNY has traded between $61.93 and $79.63 during this last 52-week period.
FNY has a beta of 1.14 and standard deviation of 26.43% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 224 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Mid Cap Growth AlphaDEX ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
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 $10.91 billion in assets, iShares Russell MidCap Growth ETF has $13.61 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?
A smart beta exchange traded fund, the First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report) debuted on 04/19/2011, and offers 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $321.20 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, FNY seeks to match the performance of the Nasdaq AlphaDEX Mid Cap Growth Index.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.70% for FNY, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 0%.
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.
For FNY, it has heaviest allocation in the Healthcare sector --about 19% of the portfolio --while Information Technology and Industrials round out the top three.
Looking at individual holdings, Avis Budget Group, Inc, (CAR - Free Report) accounts for about 1.31% of total assets, followed by Apa Corporation (APA - Free Report) and Synaptics Incorporated (SYNA - Free Report) .
FNY's top 10 holdings account for about 9.3% of its total assets under management.
Performance and Risk
The ETF has lost about -11.56% and is down about -4.57% so far this year and in the past one year (as of 02/28/2022), respectively. FNY has traded between $61.93 and $79.63 during this last 52-week period.
FNY has a beta of 1.14 and standard deviation of 26.43% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 224 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Mid Cap Growth AlphaDEX ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
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 $10.91 billion in assets, iShares Russell MidCap Growth ETF has $13.61 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.