The First Trust Mid Cap Growth AlphaDEX ETF (FNY) made its debut on 04/19/2011, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by First Trust Advisors, FNY has amassed assets over $547.79 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, FNY seeks to match the performance of the Nasdaq AlphaDEX Mid Cap Growth Index.
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.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for FNY are 0.73%, which makes it one of the more expensive products in the space.
FNY's 12-month trailing dividend yield is 0.03%.
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.
FNY's heaviest allocation is in the Industrials sector, which is about 27.9% of the portfolio. Its Healthcare and Information Technology round out the top three.
When you look at individual holdings, Lumentum Holdings Inc. (LITE) accounts for about 1.54% of the fund's total assets, followed by Ciena Corporation (CIEN) and Bloom Energy Corporation (class A) (BE).
FNY's top 10 holdings account for about 10.86% of its total assets under management.
Performance and Risk
Year-to-date, the First Trust Mid Cap Growth AlphaDEX ETF has gained about 12.25% so far, and is up about 30.74% over the last 12 months (as of 05/26/2026). FNY has traded between $78.82 $104.72 in this past 52-week period.
FNY has a beta of 1.20 and standard deviation of 20.40% for the trailing three-year period, which makes the fund 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 is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Mid-Cap Growth Index Fund ETF Shares (VOT) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell Mid-Cap Growth ETF (IWP) tracks Russell MidCap Growth Index. Vanguard Mid-Cap Growth Index Fund ETF Shares has $18.7 billion in assets, iShares Russell Mid-Cap Growth ETF has $19.98 billion. VOT has an expense ratio of 0.05% and IWP changes 0.23%.
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 - Mid 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.Boost Your Portfolio with Our Top ETF Insights
Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.
Don’t miss out on this valuable resource. It’s free!
Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
First Trust Mid Cap Growth AlphaDEX ETF (FNY): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).