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

Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the First Trust Mid Cap Growth AlphaDEX ETF (FNY) is a passively managed exchange traded fund launched on 04/19/2011.The fund is sponsored by First Trust Advisors. It has amassed assets over $416.64 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 GrowthWith market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. These types of companies, then, have a good balance of stability and growth potential.Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. 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.CostsWhen considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.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 0.53%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 20.70% of the portfolio. Financials and Healthcare round out the top three.Looking at individual holdings, Sofi Technologies, Inc. (SOFI) accounts for about 1.15% of total assets, followed by Affirm Holdings, Inc. (class A) (AFRM) and Credo Technology Group Holding Ltd (CRDO).The top 10 holdings account for about 9.3% of total assets under management.Performance and RiskFNY 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 about 5.16% so far this year and is up about 26.31% in the last one year (as of 01/29/2025). In the past 52-week period, it has traded between $66.50 and $88.28.The ETF has a beta of 1.16 and standard deviation of 21.93% 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.AlternativesFirst 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 $16.08 billion in assets, iShares Russell Mid-Cap Growth ETF has $18.57 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.Bottom-LineAn increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>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 iShares Russell Mid-Cap Growth ETF (IWP): ETF Research Reports Vanguard Mid-Cap Growth ETF (VOT): ETF Research Reports Affirm Holdings, Inc. (AFRM): Free Stock Analysis Report SoFi Technologies, Inc. (SOFI): Free Stock Analysis Report Credo Technology Group Holding Ltd. (CRDO): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks