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Is First Trust Mid Cap Growth AlphaDEX ETF (FNY) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Mid Cap Growth category of the market, the First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report) is a smart beta exchange traded fund launched on 04/19/2011.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by First Trust Advisors, FNY has amassed assets over $261.88 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. This particular fund, before fees and expenses, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for FNY are 0.70%, which makes it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 0.38%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 27% of the portfolio, the fund has heaviest allocation to the Industrials sector; Consumer Discretionary and Information Technology round out the top three.
Taking into account individual holdings, Weatherford International Plc (WFRD - Free Report) accounts for about 1.03% of the fund's total assets, followed by Celsius Holdings, Inc. (CELH - Free Report) and Saia, Inc. (SAIA - Free Report) .
The top 10 holdings account for about 9.1% of total assets under management.
Performance and Risk
The ETF return is roughly 2.21% and is up about 1.61% so far this year and in the past one year (as of 10/25/2023), respectively. FNY has traded between $55.45 and $67.14 during this last 52-week period.
FNY has a beta of 1.14 and standard deviation of 23.51% for the trailing three-year period, which makes the fund a medium risk choice in the 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 $10.09 billion in assets, iShares Russell Mid-Cap Growth ETF has $11.95 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?
Designed to provide broad exposure to the Style Box - Mid Cap Growth category of the market, the First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report) is a smart beta exchange traded fund launched on 04/19/2011.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by First Trust Advisors, FNY has amassed assets over $261.88 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. This particular fund, before fees and expenses, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for FNY are 0.70%, which makes it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 0.38%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 27% of the portfolio, the fund has heaviest allocation to the Industrials sector; Consumer Discretionary and Information Technology round out the top three.
Taking into account individual holdings, Weatherford International Plc (WFRD - Free Report) accounts for about 1.03% of the fund's total assets, followed by Celsius Holdings, Inc. (CELH - Free Report) and Saia, Inc. (SAIA - Free Report) .
The top 10 holdings account for about 9.1% of total assets under management.
Performance and Risk
The ETF return is roughly 2.21% and is up about 1.61% so far this year and in the past one year (as of 10/25/2023), respectively. FNY has traded between $55.45 and $67.14 during this last 52-week period.
FNY has a beta of 1.14 and standard deviation of 23.51% for the trailing three-year period, which makes the fund a medium risk choice in the 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 $10.09 billion in assets, iShares Russell Mid-Cap Growth ETF has $11.95 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.