Summary The First Trust Mid Cap Growth AlphaDEX ETF (FNY) is a smart beta exchange traded fund that offers broad exposure to the Style Box - Mid Cap Growth category of the market. Launched on April 19, 2011, FNY tracks the Nasdaq AlphaDEX Mid Cap Growth Index, which uses the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 600 Mid Cap Growth Index. With over $391 million in assets under management, FNY provides investors with a diversified portfolio of mid-cap growth stocks, offering a medium-risk choice in this space.

What Are Smart Beta ETFs?

Market cap weighted indexes have traditionally dominated the ETF industry, offering a low-cost and transparent way to replicate market returns. However, some investors believe that exceptional stock selection can lead to better risk-return performance, making non-cap weighted strategies attractive. Smart beta ETFs, also known as factor-based or rules-based ETFs, use alternative weighting methodologies such as equal-weighting, fundamental analysis, or volatility/momentum based weighting.

While smart beta ETFs aim to outperform market cap weighted indexes by identifying specific factors that contribute to stock performance, not all of these strategies have delivered remarkable returns. Some investors choose traditional market cap weighted ETFs that aim to match the returns of a particular market segment, such as the Style Box - Mid Cap Growth.

Fund Sponsor & Index

The First Trust Mid Cap Growth AlphaDEX ETF (FNY) is managed by First Trust Advisors, which has amassed over $391 million in assets under management for this fund. FNY seeks to replicate the performance of the Nasdaq AlphaDEX Mid Cap Growth Index before fees and expenses. The NASDAQ AlphaDEX Mid Cap Growth Index is an enhanced index that employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 600 Mid Cap Growth Index.

Cost & Other Expenses

Investors should pay attention to an ETF's expense ratio, as lower-cost products tend to produce better results than those with a higher cost. The operating expenses of FNY on an annual basis are 0.70%, making it one of the most expensive products in this space. Additionally, FNY has a 12-month trailing dividend yield of 0.57%.

Sector Exposure and Top Holdings

ETFs offer diversified exposure to minimize single stock risk, but investors should delve into a fund's holdings before investing. FNY has its heaviest allocation in the Industrials sector, accounting for approximately 21.4% of the portfolio, followed by Financials and Healthcare. When examining individual holdings, Hims & Hers Health, Inc. (HIMS) accounts for about 1.34% of the fund's total assets.

Performance and Risk

FNY has added about 4.09% and is up about 11.12% so far this year and in the past one year (as of July 15, 2025), respectively. The ETF has traded between $66.13 and $88.28 during this last 52-week period. With a beta of 1.15 and standard deviation of 21.20% for the trailing three-year period, FNY presents a medium-risk choice in this space.

Alternatives

Investors seeking to outperform the Style Box - Mid Cap Growth segment of the market may consider the First Trust Mid Cap Growth AlphaDEX ETF (FNY) as an excellent option. Other ETFs in this space include the Vanguard Mid-Cap Growth ETF (VOT), which tracks the CRSP U.S. Mid Cap Growth Index, and the iShares Russell Mid-Cap Growth ETF (IWP), which tracks the Russell MidCap Growth Index.

Bottom Line

For investors looking for cheaper and lower-risk options, traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Growth may be a more suitable choice. By considering various factors such as expense ratio, sector exposure, and top holdings, investors can make informed decisions when selecting an ETF.

Conclusion

The First Trust Mid Cap Growth AlphaDEX ETF (FNY) offers broad exposure to the Style Box - Mid Cap Growth category of the market through its tracking of the Nasdaq AlphaDEX Mid Cap Growth Index. With a medium-risk profile and over $391 million in assets under management, FNY provides investors with a diversified portfolio of mid-cap growth stocks. By considering various factors such as expense ratio, sector exposure, and top holdings, investors can determine whether FNY is an appropriate choice for their investment objectives.

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