Should First Trust Mid Cap Growth AlphaDEX ETF (FNY) Be on Your Investing Radar?

By Zacks Equity Research | April 02, 2025, 6:20 AM

The First Trust Mid Cap Growth AlphaDEX ETF (FNY) was launched on 04/19/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Growth segment of the US equity market.

The fund is sponsored by First Trust Advisors. It has amassed assets over $375.25 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

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. Thus they have a nice balance of growth potential and stability.

Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.

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 0.59%.

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.

This ETF has heaviest allocation to the Industrials sector--about 21.20% of the portfolio. Financials and Healthcare round out the top three.

Looking at individual holdings, Hims & Hers Health, Inc. (HIMS) accounts for about 1.29% of total assets, followed by Carpenter Technology Corporation (CRS) and Life Time Group Holdings, Inc. (LTH).

The top 10 holdings account for about 9.03% 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 lost about -5.90% so far this year and was up about 0.85% in the last one year (as of 04/02/2025). In the past 52-week period, it has traded between $69.75 and $88.28.

The ETF has a beta of 1.16 and standard deviation of 21.53% 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 holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FNY is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Mid-Cap Growth ETF (VOT) and the iShares Russell Mid-Cap Growth ETF (IWP) track a similar index. While Vanguard Mid-Cap Growth ETF has $14.96 billion in assets, iShares Russell Mid-Cap Growth ETF has $16.71 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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First Trust Mid Cap Growth AlphaDEX ETF (FNY): ETF Research Reports
 
Carpenter Technology Corporation (CRS): Free Stock Analysis Report
 
iShares Russell Mid-Cap Growth ETF (IWP): ETF Research Reports
 
Vanguard Mid-Cap Growth ETF (VOT): ETF Research Reports
 
Hims & Hers Health, Inc. (HIMS): Free Stock Analysis Report
 
Life Time Group Holdings, Inc. (LTH): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research