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Small Cap ETF (FYC) Hits New 52-Week High

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For investors seeking momentum, First Trust Small Cap Growth AlphaDEX Fund (FYC - Free Report) is probably on radar now. The fund just hit a 52-week high and is up nearly 29% from its 52-week low price of $30.02/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

FYC in Focus

This fund seeks to provide exposure to the small cap segment with a slightly active choice as it uses the AlphaDEX methodology to select the stock. It has key holdings in financials, healthcare, information technology, industrials, and consumer discretionary and is highly diversified across components with none holding more than 0.94% share. The product charges 70 bps in fees per year (see: all the Small Cap ETFs here).

Why the Move?

The small cap space of the broad U.S. stock market has been an area to watch lately given the roaring stock market coupled with volatility and uncertainty surrounding geopolitics, political instability in Europe and overvaluation concerns. Small cap stocks are the biggest beneficiaries of this trend as these are closely tied to the U.S. economy and are not highly exposed to the international market.

More Gains Ahead?

Currently, FYC has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank. As a result, there is still some promise for investors who want to ride on this surging ETF.

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