If you're interested in broad exposure to the Mid Cap Growth segment of the US equity market, look no further than the First Trust Mid Cap Growth AlphaDEX ETF (FNY), a passively managed exchange traded fund launched on April 19, 2011.
The fund is sponsored by First Trust Advisors. It has amassed assets over $499.22 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. Thus they have a nice balance of growth potential and stability.
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. Additionally, growth stocks have a greater level of risk associated with them. 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
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 0.73%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0.03%.
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 26.8% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, Lumentum Holdings Inc. (LITE) accounts for about 1.74% of total assets, followed by Ciena Corporation (CIEN) and Guardant Health, Inc. (GH).
The top 10 holdings account for about 11.1% 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 roughly 4.14% so far this year and was up about 13.49% in the last one year (as of 02/13/2026). In the past 52-week period, it has traded between $66.13 and $98.93.
The ETF has a beta of 1.19 and standard deviation of 19.98% for the trailing three-year period, making it a medium risk choice in the space. With about 224 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 excellent 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 $17.45 billion in assets, iShares Russell Mid-Cap Growth ETF has $19.47 billion. VOT has an expense ratio of 0.05% and IWP charges 0.23%.
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.
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First Trust Mid Cap Growth AlphaDEX ETF (FNY): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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