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 QuoteFNX - 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 $1.26 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

Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. 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.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.58%, 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

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector--about 20.30% of the portfolio. Industrials and Consumer Discretionary round out the top three.

Looking at individual holdings, Affirm Holdings, Inc. (class A) (AFRM Quick QuoteAFRM - Free Report) accounts for about 0.56% of total assets, followed by Urban Outfitters, Inc. (URBN Quick QuoteURBN - Free Report) and New Fortress Energy Inc. (NFE Quick QuoteNFE - Free Report) .

The top 10 holdings account for about 4.71% 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 has added about 3.62% so far this year and is up roughly 16.60% in the last one year (as of 02/11/2025). In the past 52-week period, it has traded between $102.22 and $127.28.

The ETF has a beta of 1.22 and standard deviation of 20.91% for the trailing three-year period, making it a medium risk choice in the space. With about 451 holdings, it effectively diversifies company-specific risk.

Alternatives

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 QuoteVO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH Quick QuoteIJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $76.76 billion in assets, iShares Core S&P Mid-Cap ETF has $98.71 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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.