Getting the highest returns doesn’t mean exposing a portfolio to only growth via small-caps, and mitigating risk doesn’t always mean large-cap names. Investors can get the best of both worlds with mid-cap funds.

Given the current market landscape, it might seem better for an investor to leave their portfolios in the hands of the professionals. Rising inflation and an ongoing pandemic can inject a heavy dose of volatility into the markets.

However, active management isn’t the only option. A passive indexing approach can also maximize gains using an enhanced approach via First Trust AlphaDEX^® exchange traded funds (ETFs).

The funds are designed to track the performance of a group of custom “enhanced” indexes which employ the proprietary, rules-based AlphaDEX fundamental stock selection methodology. The methodology is an investment process that seeks to produce similar correlation and risk characteristics as broad market indexes while seeking outperformance due to stock selection and weighting.

4 Mid-Cap Funds Using the AlphaDEX Approach

1. First Trust Mid Cap Value AlphaDEX Fund (FNK): The fund will normally invest at least 90% of its net assets in the common stocks that comprise the index. The index is designed to select value stocks from the NASDAQ US 600 Mid Cap Index that may generate positive alpha, or risk-adjusted returns, relative to traditional indexes through the use of the AlphaDEX selection methodology.
2. First Trust Mid Cap Core AlphaDEX Fund (FNX): The fund will normally invest at least 90% of its net assets in the common stocks that comprise the index. The index is designed to select stocks from the NASDAQ US 600 Mid Cap Index that may generate positive alpha, or risk-adjusted returns, relative to traditional indexes through the use of the AlphaDEX selection methodology.
3. First Trust Mid Cap Growth AlphaDEX Fund (FNY): The fund will normally invest at least 90% of its net assets in the common stocks that comprise the index. The index is designed to select growth stocks from the NASDAQ US 600 Mid Cap Index that may generate positive alpha, or risk-adjusted returns, relative to traditional indexes through the use of the AlphaDEX selection methodology.
4. First Trust Mid Cap US Equity Select ETF (RNMC): The fund will normally invest at least 90% of its net assets in the common stocks and real estate investment trusts (REITs) that comprise the index. The index is designed to select dividend-paying securities issued by mid-capitalization U.S. companies.

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