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Is First Trust Small Cap Growth AlphaDEX ETF (FYC) a Strong ETF Right Now?
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A smart beta exchange traded fund, the First Trust Small Cap Growth AlphaDEX ETF (FYC - Free Report) debuted on 04/19/2011, and offers broad exposure to the Style Box - Small Cap Growth category of the market.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.33 billion, making it one of the average sized ETFs in the Style Box - Small Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the Nasdaq AlphaDEX Small Cap Growth Index.
The NASDAQ AlphaDEX Small Cap Growth Index is an enhanced which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 700 Small 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 FYC are 0.70%, which makes it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.11%.
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.
Representing 27.9% of the portfolio, the fund has heaviest allocation to the Healthcare sector; Industrials and Information Technology round out the top three.
When you look at individual holdings, 10x Genomics, Inc. (class A) (TXG) accounts for about 1.36% of the fund's total assets, followed by Twist Bioscience Corporation (TWST) and Ringcentral, Inc. (class A) (RNG).
Its top 10 holdings account for approximately 9.94% of FYC's total assets under management.
Performance and Risk
So far this year, FYC has gained about 18.06%, and is up about 21.65% in the last one year (as of 10/23/2026). During this past 52-week period, the fund has traded between $87.35 and $127.34.
The fund has a beta of 1.19 and standard deviation of 21.75% for the trailing three-year period, which makes FYC a high risk choice in this particular space. With about 263 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Small Cap Growth AlphaDEX ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Russell 2000 Growth ETF (IWO) tracks Russell 2000 Growth Index and the Vanguard Morningstar Small-Cap Growth ETF (VBK) tracks CRSP U.S. Small Cap Growth Index. iShares Russell 2000 Growth ETF has $13.4 billion in assets, Vanguard Morningstar Small-Cap Growth ETF has $22.16 billion. IWO has an expense ratio of 0.24% and VBK changes 0.05%.
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 - Small 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 Small Cap Growth AlphaDEX ETF (FYC) a Strong ETF Right Now?
A smart beta exchange traded fund, the First Trust Small Cap Growth AlphaDEX ETF (FYC - Free Report) debuted on 04/19/2011, and offers broad exposure to the Style Box - Small Cap Growth category of the market.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.33 billion, making it one of the average sized ETFs in the Style Box - Small Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the Nasdaq AlphaDEX Small Cap Growth Index.
The NASDAQ AlphaDEX Small Cap Growth Index is an enhanced which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 700 Small 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 FYC are 0.70%, which makes it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.11%.
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.
Representing 27.9% of the portfolio, the fund has heaviest allocation to the Healthcare sector; Industrials and Information Technology round out the top three.
When you look at individual holdings, 10x Genomics, Inc. (class A) (TXG) accounts for about 1.36% of the fund's total assets, followed by Twist Bioscience Corporation (TWST) and Ringcentral, Inc. (class A) (RNG).
Its top 10 holdings account for approximately 9.94% of FYC's total assets under management.
Performance and Risk
So far this year, FYC has gained about 18.06%, and is up about 21.65% in the last one year (as of 10/23/2026). During this past 52-week period, the fund has traded between $87.35 and $127.34.
The fund has a beta of 1.19 and standard deviation of 21.75% for the trailing three-year period, which makes FYC a high risk choice in this particular space. With about 263 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Small Cap Growth AlphaDEX ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Russell 2000 Growth ETF (IWO) tracks Russell 2000 Growth Index and the Vanguard Morningstar Small-Cap Growth ETF (VBK) tracks CRSP U.S. Small Cap Growth Index. iShares Russell 2000 Growth ETF has $13.4 billion in assets, Vanguard Morningstar Small-Cap Growth ETF has $22.16 billion. IWO has an expense ratio of 0.24% and VBK changes 0.05%.
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 - Small 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.