If you're interested in broad exposure to the Mid Cap Blend segment of the US equity market, look no further than the First Trust Mid Cap Core AlphaDEX ETF (
FNX Quick Quote FNX - Free Report) , a passively managed exchange traded fund launched on 05/08/2007.
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.03 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. These types of companies, then, have a good balance of stability and growth potential.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
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 1.22%.
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.
This ETF has heaviest allocation to the Industrials sector--about 21.70% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Super Micro Computer, Inc. (
SMCI Quick Quote SMCI - Free Report) accounts for about 0.84% of total assets, followed by Carnival Corporation ( CCL Quick Quote CCL - Free Report) and Builders Firstsource, Inc. ( BLDR Quick Quote BLDR - Free Report) .
The top 10 holdings account for about 5.42% 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 return is roughly 8.42% so far this year and was up about 8.01% in the last one year (as of 09/18/2023). In the past 52-week period, it has traded between $80.01 and $100.97.
The ETF has a beta of 1.22 and standard deviation of 21.48% for the trailing three-year period, making it a medium risk choice in the space. With about 450 holdings, it effectively diversifies company-specific risk.
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 Mid-Cap ETF (
VO Quick Quote VO - Free Report) and the iShares Core S&P Mid-Cap ETF ( IJH Quick Quote IJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $53.85 billion in assets, iShares Core S&P Mid-Cap ETF has $72.68 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.