First Trust Mid Cap US Equity Select ETF (RNMC)

ETF First Trust Mid Cap US Equity Select ETF (FNX) Summary

Profile:

FNX is an actively managed ETF that invests in mid-cap US equities. The fund primarily focuses on companies with strong earnings growth potential and attractive valuations. The ETF uses a combination of quantitative and fundamental analysis to select its holdings.

Objective:

The primary investment goal of FNX is to provide long-term capital appreciation.

Issuer:

First Trust Advisors L.P. is the issuer of FNX. First Trust is a leading provider of exchange-traded funds (ETFs) with over $277 billion in assets under management. The firm has a strong reputation and track record in the ETF industry.

Market Share and Assets:

FNX has a market share of 0.66% in the mid-cap growth ETF category. The ETF has total net assets of $639.73 million.

Moat:

FNX's competitive advantages include:

• Active management: The ETF's active management approach allows it to select stocks that have the potential to outperform the market.
• Experienced management team: The ETF is managed by a team of experienced portfolio managers with a strong track record of success.
• Niche market focus: FNX focuses on mid-cap growth stocks, which is a niche market that is often overlooked by larger asset managers.

Financial Performance:

FNX has generated an annualized return of 15.45% since its inception in 2014. This compares favorably to the S&P 500 Index, which has returned 10.13% over the same period.

Growth Trajectory:

FNX has experienced strong growth in recent years. The ETF's assets have increased from $133 million in 2014 to $639 million in 2023. This growth is likely to continue as investors continue to seek out actively managed investment solutions.

Liquidity:

FNX has an average daily trading volume of over 100,000 shares. This suggests that the ETF is relatively liquid and easy to trade. The bid-ask spread is around 0.05%, which is relatively low.

Market Dynamics:

The market dynamics most likely to affect FNX are:

• Economic growth: Mid-cap companies tend to perform well in periods of economic growth.
• Interest rates: Rising interest rates can have a negative impact on growth stocks.
• Market volatility: High market volatility can lead to higher trading costs and reduced liquidity.

Competitors:

FNX's key competitors include:

• iShares S&P MidCap 400 Growth ETF (IJK) - Market share: 34.70%
• Schwab Mid-Cap ETF (SCHM) - Market share: 20.89%
• Vanguard Mid-Cap Growth ETF (VOT) - Market share: 12.55%

Expense Ratio:

FNX has an expense ratio of 0.75%. This is slightly higher than the average expense ratio for mid-cap growth ETFs.

Investment Approach and Strategy:

FNX uses an active management approach to select stocks that have the potential to outperform the market. The ETF invests primarily in mid-cap US equities with strong earnings growth potential and attractive valuations.

Key Points:

• Actively managed ETF that focuses on mid-cap growth stocks.
• Strong track record of outperforming the market.
• Experienced management team with a strong reputation.
• Relatively low expense ratio.

Risks:

• Market risk: The value of FNX's holdings can fluctuate based on market conditions.
• Volatility risk: Mid-cap growth stocks tend to be more volatile than larger-cap stocks.
• Active management risk: The ETF's performance is dependent on the success of the management team.

Who Should Consider Investing?

FNX is suitable for investors who are looking for:

• Long-term capital appreciation.
• Exposure to mid-cap growth stocks.
• Active management and stock selection expertise.

Fundamental Rating Based on AI:

Based on an AI-based analysis of the factors mentioned above, FNX receives a Fundamental Rating of 8.5 out of 10. The rating takes into account the ETF's strong financial performance, experienced management team, and competitive advantages. However, investors should be aware of the risks associated with the ETF, including market risk and volatility risk.

Resources and Disclaimers:

• https://www.firsttrust.com/etfs/docs/fnx.pdf
• https://www.morningstar.com/etfs/xnas/fnx
• https://etfdb.com/etf/FNX/

**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.