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Should First Trust Mid Cap Growth AlphaDEX ETF (FNY) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report) is a passively managed exchange traded fund launched on 04/19/2011.
The fund is sponsored by First Trust Advisors. It has amassed assets over $362.09 million, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
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.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
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 0.70%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 0.08%.
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.
This ETF has heaviest allocation to the Industrials sector--about 23.10% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Coca-Cola Consolidated Inc. (COKE - Free Report) accounts for about 0.90% of total assets, followed by Cava Group, Inc. (CAVA - Free Report) and The Ensign Group, Inc. (ENSG - Free Report) .
The top 10 holdings account for about 8.5% of total assets under management.
Performance and Risk
FNY 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.
The ETF has added about 16.96% so far this year and is up about 32.49% in the last one year (as of 09/24/2024). In the past 52-week period, it has traded between $55.49 and $79.67.
The ETF has a beta of 1.14 and standard deviation of 22.51% for the trailing three-year period, making it 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 carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FNY is a good option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $14.08 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.94 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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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Should First Trust Mid Cap Growth AlphaDEX ETF (FNY) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the First Trust Mid Cap Growth AlphaDEX ETF (FNY - Free Report) is a passively managed exchange traded fund launched on 04/19/2011.
The fund is sponsored by First Trust Advisors. It has amassed assets over $362.09 million, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
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.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
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 0.70%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 0.08%.
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.
This ETF has heaviest allocation to the Industrials sector--about 23.10% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Coca-Cola Consolidated Inc. (COKE - Free Report) accounts for about 0.90% of total assets, followed by Cava Group, Inc. (CAVA - Free Report) and The Ensign Group, Inc. (ENSG - Free Report) .
The top 10 holdings account for about 8.5% of total assets under management.
Performance and Risk
FNY 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.
The ETF has added about 16.96% so far this year and is up about 32.49% in the last one year (as of 09/24/2024). In the past 52-week period, it has traded between $55.49 and $79.67.
The ETF has a beta of 1.14 and standard deviation of 22.51% for the trailing three-year period, making it 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 carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FNY is a good option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $14.08 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.94 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.