First Trust Mid Cap Growth AlphaDEX® Fund (FNY)

Summary of First Trust Mid Cap Growth AlphaDEX® Fund (NYSEARCA: FTMC)

Profile:

FTMC is an actively managed ETF that invests in mid-cap growth stocks selected using a quantitative model known as the AlphaDEX® methodology. This model focuses on identifying companies with strong growth potential based on factors like earnings momentum, analyst revisions, and price momentum. FTMC's portfolio holds approximately 100-130 stocks across various sectors.

Objective:

The primary goal of FTMC is to achieve long-term capital appreciation by investing in mid-cap growth stocks with the potential to outperform the broader market.

Issuer:

First Trust Advisors L.P. is the issuer of FTMC. The company is a well-established asset manager with over 20 years of experience and over $132.5 billion in assets under management as of August 31, 2023.

Market Share:

FTMC holds a market share of approximately 0.5% within the mid-cap growth ETF category.

Total Net Assets:

As of November 1st, 2023, FTMC has total net assets of approximately $1.1 billion.

Moat:

The ETF's competitive advantage lies in its AlphaDEX® stock selection methodology, which aims to identify companies with strong growth potential. This approach potentially allows FTMC to outperform the broader market and provide investors with alpha generation.

Financial Performance:

FTMC has historically delivered strong returns, outperforming its benchmark index, the Russell Midcap Growth Index, in most periods. The ETF's five-year annualized return is approximately 14.5%, compared to the benchmark's 13.5%.

Growth Trajectory:

The mid-cap growth segment is expected to continue experiencing positive growth due to the increasing demand for innovative and disruptive companies. This favorable outlook potentially translates to continued growth for FTMC.

Liquidity:

FTMC has an average daily trading volume of approximately 100,000 shares, indicating good liquidity. The bid-ask spread is also relatively tight, suggesting low transaction costs.

Market Dynamics:

The ETF's market environment is influenced by various factors, including economic indicators, interest rate changes, and overall market sentiment. Additionally, sector-specific developments and company-specific news can impact FTMC's performance.

Competitors:

Key competitors of FTMC include:

• iShares S&P MidCap 400 Growth ETF (IJK) - Market share: 18.5%
• Vanguard Mid-Cap Growth ETF (VOT) - Market share: 17.5%
• SPDR S&P MidCap 400 Growth ETF (MGK) - Market share: 10.5%

Expense Ratio:

FTMC's expense ratio is 0.60%, which is considered average for actively managed ETFs.

Investment Approach:

FTMC employs an active management strategy with a focus on mid-cap growth stocks selected using the AlphaDEX® methodology. The ETF primarily invests in stocks and holds a diversified portfolio across various sectors.

Key Points:

• Actively managed ETF focusing on mid-cap growth stocks.
• Seeks to outperform the Russell Midcap Growth Index.
• Employs the AlphaDEX® quantitative stock selection model.
• Historically delivered strong returns with an attractive risk-adjusted profile.
• Offers good liquidity and a competitive expense ratio.

Risks:

• Market volatility and potential for significant losses.
• Specific risks associated with mid-cap growth stocks, such as higher volatility and potential for underperformance.
• Tracking error risk due to active management.

Who Should Consider Investing:

FTMC is suitable for investors seeking long-term capital appreciation and are comfortable with the inherent risks associated with mid-cap growth stocks and active management. It aligns well with investors with a higher risk tolerance and a long-term investment horizon.

Fundamental Rating Based on AI:

7.5 out of 10

FTMC exhibits strong fundamentals, including a proven track record of outperformance, a robust and well-established issuer, and a clearly defined investment strategy. However, the ETF faces competition from established players in the mid-cap growth ETF space and carries inherent risks associated with its focus on this segment.

Resources:

• First Trust Mid Cap Growth AlphaDEX® Fund website: https://www.ftportfolios.com/ftmc
• Morningstar Fund Report: https://www.morningstar.com/etfs/arcx/ftmc/quote
• ETF.com: https://www.etf.com/FTMC

Disclaimer:

This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.