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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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FNY has been able to amass assets over $241.70 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. This particular fund 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.77%, making it one of the most expensive products in the space.
FNY's 12-month trailing dividend yield is 0.37%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 20.60% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Taking into account individual holdings, Builders Firstsource, Inc. (BLDR - Free Report) accounts for about 0.95% of the fund's total assets, followed by Wynn Resorts, Limited (WYNN - Free Report) and Allegro Microsystems, Inc. (ALGM - Free Report) .
FNY's top 10 holdings account for about 8.8% of its total assets under management.
Performance and Risk
So far this year, FNY has added about 4.67%, and is up roughly 0.01% in the last one year (as of 05/26/2023). During this past 52-week period, the fund has traded between $52.58 and $64.12.
The fund has a beta of 1.13 and standard deviation of 24.15% for the trailing three-year period, which makes FNY a medium risk choice in this particular space. With about 226 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 Mid-Cap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard Mid-Cap Growth ETF has $9.84 billion in assets, iShares Russell Mid-Cap Growth ETF has $11.94 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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FNY has been able to amass assets over $241.70 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. This particular fund 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.77%, making it one of the most expensive products in the space.
FNY's 12-month trailing dividend yield is 0.37%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 20.60% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Taking into account individual holdings, Builders Firstsource, Inc. (BLDR - Free Report) accounts for about 0.95% of the fund's total assets, followed by Wynn Resorts, Limited (WYNN - Free Report) and Allegro Microsystems, Inc. (ALGM - Free Report) .
FNY's top 10 holdings account for about 8.8% of its total assets under management.
Performance and Risk
So far this year, FNY has added about 4.67%, and is up roughly 0.01% in the last one year (as of 05/26/2023). During this past 52-week period, the fund has traded between $52.58 and $64.12.
The fund has a beta of 1.13 and standard deviation of 24.15% for the trailing three-year period, which makes FNY a medium risk choice in this particular space. With about 226 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 Mid-Cap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard Mid-Cap Growth ETF has $9.84 billion in assets, iShares Russell Mid-Cap Growth ETF has $11.94 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.