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Is First Trust Mid Cap Growth AlphaDEX ETF (FNY) a Strong ETF Right Now?
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Making its debut on 04/19/2011, smart beta exchange traded fund First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report) provides investors 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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.
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
The fund is managed by First Trust Advisors. FNY has been able to amass assets over $318.03 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for FNY are 0.70%, which makes it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.23%.
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.
For FNY, it has heaviest allocation in the Industrials sector --about 27.90% of the portfolio --while Information Technology and Consumer Discretionary round out the top three.
Taking into account individual holdings, Affirm Holdings, Inc. (class A) (AFRM - Free Report) accounts for about 1.05% of the fund's total assets, followed by Immunogen, Inc. (IMGN) and Bellring Brands, Inc. (BRBR - Free Report) .
FNY's top 10 holdings account for about 9.2% of its total assets under management.
Performance and Risk
Year-to-date, the First Trust Mid Cap Growth AlphaDEX ETF has added about 6.11% so far, and is up roughly 19.83% over the last 12 months (as of 02/29/2024). FNY has traded between $55.49 and $72.28 in this past 52-week period.
The fund has a beta of 1.11 and standard deviation of 23.25% 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 $12.34 billion in assets, iShares Russell Mid-Cap Growth ETF has $15.05 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?
Making its debut on 04/19/2011, smart beta exchange traded fund First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report) provides investors 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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.
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
The fund is managed by First Trust Advisors. FNY has been able to amass assets over $318.03 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for FNY are 0.70%, which makes it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.23%.
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.
For FNY, it has heaviest allocation in the Industrials sector --about 27.90% of the portfolio --while Information Technology and Consumer Discretionary round out the top three.
Taking into account individual holdings, Affirm Holdings, Inc. (class A) (AFRM - Free Report) accounts for about 1.05% of the fund's total assets, followed by Immunogen, Inc. (IMGN) and Bellring Brands, Inc. (BRBR - Free Report) .
FNY's top 10 holdings account for about 9.2% of its total assets under management.
Performance and Risk
Year-to-date, the First Trust Mid Cap Growth AlphaDEX ETF has added about 6.11% so far, and is up roughly 19.83% over the last 12 months (as of 02/29/2024). FNY has traded between $55.49 and $72.28 in this past 52-week period.
The fund has a beta of 1.11 and standard deviation of 23.25% 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 $12.34 billion in assets, iShares Russell Mid-Cap Growth ETF has $15.05 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.