Is the First Trust Mid Cap Growth AlphaDEX ETF (FNY) a Strong Buy Right Now?

The FNY — formally the First Trust Mid Cap Growth AlphaDEX ETF — is an exchange‑traded fund launched in April 2011, whose goal is to track the performance of the Nasdaq AlphaDEX Mid Cap Growth Index. The fund uses a rules‑based “enhanced” indexing methodology to select mid‑cap U.S. growth stocks from the broader Nasdaq US 600 Mid Cap Growth universe. Here are key points to consider: Strategy & methodology: FNY focuses on mid‑cap growth stocks — typically companies with market capitalizations between roughly US$2 billion and US$10 billion (though actual holdings vary) — and selects them based on a combination of growth metrics (such as 3‑, 6‑, and 12‑month price appreciation, sales‑to‑price, one‑year sales growth) and value factors (book‑value/price, cash‑flow/price, return on assets). Because the index is “enhanced” rather than purely cap‑weighted, FNY aims to outperform a standard mid‑cap growth benchmark through selection and weighting discipline. Cost & size: The fund charges an expense ratio of approximately 0.70% per annum, which is higher than many plain mid‑cap growth ETFs. As of November 2025, the fund held about US$440 million in net assets with some 224 holdings. Performance & risk profile: Over its lifetime, FNY has delivered annualized returns of around 11–12% since inception (as of late 2025). For example, a fact sheet shows a net‑asset‑value return of ~12.52% since inception and 16.48% over the past five years. Its three‑year standard deviation is about 19.30% with a beta around 1.11, indicating higher volatility and somewhat greater sensitivity to market swings than the benchmark. Pros & cons: On the plus side, the enhanced methodology offers the potential for out‑performance if the quant‑screen works well, and the fund provides mid‑cap growth exposure without the huge size of large‑cap growth companies. On the downside, the higher expense ratio eats into returns, the quant methodology may not always beat in all market environments, and growth‑style stocks tend to be more volatile — meaning higher risk if markets go sideways or tilt toward value. As one research piece notes, FNY might appeal to investors wanting a tactical tilt toward mid‑cap growth, but may be less compelling for those wanting a broad, very low‑cost core ETF. Analyst view: The fund holds a Zacks ETF Rank of 2 (Buy), based on expected asset class return, expense ratio, and momentum metrics. Bottom line: FNY can be a worthwhile choice for investors who believe the mid‑cap growth segment will outperform, and who are comfortable with somewhat elevated volatility and a higher fee. But for investors seeking a low‑cost, broad mid‑cap growth exposure without paying extra for enhanced strategy, other funds (with expense ratios in the 0.07–0.23% range) might be more suitable. && #MidCapGrowthETF #EnhancedIndexing #FNYETF #InvestingStrategy && #MidCapGrowthETF #EnhancedIndexing #FNYETF #InvestingStrategy #SlimScan #GrowthStocks #CANSLIM