First Trust Small Cap Growth AlphaDEX Fund (FYC) Fund Overview

First Trust Small Cap Growth AlphaDEX Fund (FYC) Financial Services Profile

First Trust Small Cap Growth AlphaDEX Fund (FYC), with a market cap of $0.88 billion, is an ETF designed to mirror the Nasdaq AlphaDEX Small Cap Growth Index. It offers investors exposure to a diversified portfolio of small-cap growth stocks selected through a proprietary AlphaDEX methodology, operating within the competitive asset management landscape.

What Is the Investment Thesis for FYC?

FYC presents an investment opportunity for those seeking exposure to small-cap growth stocks through a rules-based, potentially outperforming strategy. With a beta of 1.40, the fund exhibits higher volatility compared to the broader market, which may appeal to investors with a higher risk tolerance seeking potentially higher returns. The fund's investment thesis hinges on the continued growth and innovation within the small-cap sector. The fund's performance is directly linked to the efficacy of the AlphaDEX methodology in identifying and weighting stocks with superior growth characteristics. Key value drivers include the fund's ability to attract and retain assets under management (AUM) and its expense ratio relative to competing ETFs. Upcoming catalysts include potential changes to the index methodology or increased investor interest in small-cap growth strategies.

Based on FMP financials and quantitative analysis

FYC Key Highlights

FYC's objective is to replicate the price and yield of the Nasdaq AlphaDEX Small Cap Growth Index.

• The fund offers exposure to a diversified portfolio of small-cap growth stocks.
• The fund employs a rules-based methodology to select and weight its holdings.
• FYC's beta of 1.40 indicates higher volatility compared to the broader market.
• The fund's performance is closely tied to the performance of its underlying index.

Who Are FYC's Competitors?

FYC is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are FYC's Key Strengths?

Rules-based AlphaDEX methodology.

• Exposure to the high-growth small-cap sector.
• Established brand name of First Trust.
• Diversified portfolio of holdings.

What Are FYC's Weaknesses?

Higher volatility compared to the broader market (beta of 1.40).

• Dependence on the performance of the Nasdaq AlphaDEX Small Cap Growth Index.
• Potential for underperformance relative to active managers in certain market conditions.
• No dividend yield.

What Are the Key Risks for FYC?

Economic downturn or market volatility impacting small-cap stocks.

• Rising interest rates impacting growth stock valuations.
• Increased competition from other ETFs and investment products.
• Changes to the regulatory environment impacting ETFs.
• Dependence on the performance of the Nasdaq AlphaDEX Small Cap Growth Index.

What Are FYC's Competitive Advantages?

• Proprietary AlphaDEX methodology for stock selection and weighting.
• Established track record of tracking the Nasdaq AlphaDEX Small Cap Growth Index.
• Brand recognition and distribution network of First Trust.

What Does FYC Do?

The First Trust Small Cap Growth AlphaDEX Fund (FYC) is an exchange-traded fund (ETF) that seeks to track the investment results of the Nasdaq AlphaDEX Small Cap Growth Index. The fund employs a rules-based methodology to select and weight small-cap growth stocks, aiming to outperform traditional market-cap-weighted indexes. FYC was created to provide investors with a targeted approach to accessing the small-cap growth segment of the U.S. equity market. The Nasdaq AlphaDEX Small Cap Growth Index uses growth factors including 3, 6, and 12-month price appreciation, sales to price ratio, and momentum, and separate value factors including book value to price, cash flow to price, and return on assets, to identify stocks with the potential for growth. The fund's holdings are rebalanced and reconstituted periodically to maintain alignment with the index. FYC operates within the asset management industry, offering a specific investment strategy focused on small-cap growth stocks. The fund's performance is closely tied to the performance of its underlying index and the overall health of the small-cap growth market. As an ETF, FYC offers investors liquidity and transparency, trading on major exchanges and providing daily disclosure of its portfolio holdings.

What Products and Services Does FYC Offer?

• Tracks the Nasdaq AlphaDEX Small Cap Growth Index.
• Invests in a diversified portfolio of small-cap growth stocks.
• Employs a rules-based methodology to select and weight its holdings.
• Provides investors with exposure to the small-cap growth segment of the U.S. equity market.
• Offers a potentially outperforming strategy compared to traditional market-cap-weighted indexes.
• Trades on major exchanges, providing liquidity and transparency.

How Does FYC Make Money?

• Generates revenue through management fees charged on assets under management (AUM).
• Aims to attract and retain AUM by delivering competitive investment performance.
• Manages expenses to maintain profitability and offer a cost-effective investment vehicle.

What Industry Does FYC Operate In?

The asset management industry is characterized by intense competition and evolving investor preferences. ETFs like FYC compete with other passive and active investment strategies targeting the small-cap growth segment. The industry is influenced by macroeconomic factors, market volatility, and regulatory changes. The growth of the ETF market has been driven by increasing demand for low-cost, transparent investment vehicles. FYC operates within this landscape by offering a specific, rules-based approach to small-cap growth investing. Competitors include other ETFs and mutual funds with similar investment objectives.

Who Are FYC's Key Customers?

• Individual investors seeking exposure to small-cap growth stocks.
• Financial advisors looking for diversified investment solutions for their clients.
• Institutional investors seeking to allocate capital to the small-cap growth segment.

FYC Financials

FYC Latest News

FYC Analyst Consensus

FYC MoonshotScore

FYC Financials Stock FAQ

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

Official Resources