First Trust Mid Cap Growth AlphaDEX Fund (NASDAQ: FNY)

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First Trust Mid Cap Growth AlphaDEX Fund

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Robinhood Markets co-founder Baiju Bhatt steps down from executive role, CEO praises his pivotal role in company&#39;s evolution.

Robinhood&#39;s Co-Founder Baiju Bhatt Steps Down, CEO Commends His Role In Company&#39;s Evolution &#39;From A Seed Of An Idea To The Global Public Company&#39;

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Shares of AMC Entertainment were continuing to surge on Wednesday, and the rally could boost the valuation of three ETFs that count AMC among their largest holdings.

The 3 ETFs With Highest Exposure To AMC Entertainment Stock

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Best &amp; Worst ETFs and Mutual Funds: Mid Cap Growth Style

Robinhood Markets, Inc.&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/HOOD#NASDAQ">HOOD</a>) said its co-founder and Chief Creative Officer, Baiju Bhatt, will step down from the executive role after over ten years in leadership to&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/03/g37883570/robinhood-markets-inc-co-founder-baiju-bhatt-to-step-down-as-chief-creative-officer" rel="noreferrer noopener">pursue other entrepreneurial interests.</a>
However, Bhatt will remain a member of Robinhood&#8217;s Board of Directors.
&#8220;Baiju and I have been co-founders for over 10 years and friends for over 20,&#8221; said Vlad Tenev, CEO and Co-Founder of Robinhood.&nbsp;
Last week, Robinhood said total funded customers grew to 23.6 million at the end of February,&nbsp;<a target="_blank" href="https://www.benzinga.com/news/24/03/37678720/robinhood-markets-stock-surges-after-the-close-heres-why" rel="noreferrer noopener">up approximately 130,000 from January</a>.
Net deposits were $3.6 billion last month. The company had total assets under custody of $118.7 billion as of the end of February, up 16% from January.
Robinhood noted that net deposits totaled $21.6 billion over the last 12 months.
&#8220;I am grateful for all of his contributions to Robinhood over the last decade,&#8221; Tenev said.
&#8220;His passion for entrepreneurship and commitment to our mission to democratize finance for all helped build Robinhood from a seed of an idea to the global public company it is today,&#8221; he added.&nbsp;
HOOD stock has gained over 113.77% in the past year. Investors can gain exposure to the stock via&nbsp;First Trust Mid Cap Core AlphaDEX Fund&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FNX#NASDAQ">FNX</a>) and&nbsp;First Trust Mid Cap Growth AlphaDEX Fund&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FNY#NASDAQ">FNY</a>).
Price Action: HOOD shares are trading lower by 1.26% to $18.85 premarket on the last check Friday.
Photo via Shutterstock

Robinhood's Co-Founder Baiju Bhatt Steps Down, CEO Commends His Role In Company's Evolution 'From A Seed Of An Idea To The Global Public Company'

Shares of AMC Entertainment were continuing to surge on Wednesday, and the rally&nbsp;could boost the valuation of three ETFs that count AMC among their largest holdings.
Three ETFs have weighting of AMC shares at 2% or higher, according to <a href="https://etfdb.com/stock/AMC/">ETFDB</a>. AMC comprises less than 1% of assets in all other ETFs that hold the movie theater chain&#39;s stock.&nbsp;
The ETF&nbsp;weightings could change along with the share price of AMC and also change during quarterly rebalancing where applicable. Here is a look at three ETFs that have the largest weighting in shares of AMC Entertainment Holdings (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/amc#NYSE">AMC</a>).
See Also: <a href="https://www.benzinga.com/money/buy-amc-stock/">How To Buy AMC Stock</a>
SoFi Social 50 ETF: The SoFi&nbsp;Social 50 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sfyf#NYSE">SFYF</a>) <a href="https://www.sofi.com/invest/etfs/sfyf/">tracks </a>the top 50&nbsp;U.S. stocks held by investors on SoFi Technologies (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/sofi#NASDAQ">SOFI</a>).
AMC shares represented 11.8% of holdings as of Tuesday, a figure that is set to rise with Wednesday&rsquo;s price surge. Other large holdings in the ETF include Amazon.com Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/amzn#NASDAQ">AMZN</a>), Apple Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/aapl#NASDAQ">AAPL</a>), Tesla Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tsla#NASDAQ">TSLA</a>) and GameStop Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gme#NYSE">GME</a>).
The SoFi Social 50 ETF saw shares halted on Wednesday due to the increased valuation and exposure to AMC, a move that is<a href="https://twitter.com/maybebullish/status/1400142941000192004">&nbsp;uncommon</a> for ETFs. Shares of the ETF are up 15% on Wednesday.
Invesco Dynamic Leisure &amp; Entertainment: This&nbsp;ETF, which&nbsp;<a href="https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Institutional&amp;ticker=PEJ">offers </a>exposure to 30 of the largest U.S. leisure and entertainment companies, is up 11% Wednesday thanks to the increase in AMC shares.
The Invesco Dynamic Leisure &amp; Entertainment ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pej#NYSE">PEJ</a>) counts AMC as the No. 1&nbsp;holding at 10.2% of assets as of June 1. The next largest holding is Booking Holdings (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bkng#NASDAQ">BKNG</a>) at 5%.
Related Link:<a href="https://www.benzinga.com/news/21/06/21389413/own-amc-shares-get-rewarded-with-a-free-popcorn-under-new-investor-connect-program"> Own AMC Shares, Get Rewarded With A Free Popcorn Under New Investor Connect Program</a>
First Trust Mid Cap Growth: The First Trust Mid Cap Growth AlphaDEX Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/fny#NYSE">FNY</a>) <a href="https://www.ftportfolios.com/retail/etf/etfsummary.aspx?Ticker=FNY">holds </a>225 stocks. AMC Entertainment is the largest holding at 2.3% of assets as of June 1. The holding in AMC is significant for the ETF, as no other position is worth more than 1% of assets.
The FNY ETF seeks to outperform the Nasdaq US 600 Index with positions in 600 mid-cap&nbsp;U.S. companies. The ETF holds positions in companies with market caps between $1.2 billion and $30.6 billion. The ETF rebalances quarterly. Shares of FNY are up 2% on Wednesday.&nbsp;
AMC Price Action: Shares of AMC Entertainment gained 95.22% Wednesday, closing at $62.55.&nbsp;

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		The Mid Cap Growth style ranks sixth out of the twelve fund styles as detailed in my <a href="http://blog.newconstructs.com/2012/10/11/investment-style-rankings-for-etfs-mutual-funds/">style rankings for ETFs and mutual funds</a>. It gets my Dangerous rating, which is based on aggregation of ratings of 10 ETFs and 390 mutual funds in the Mid Cap Growth style as of October 17, 2012. Prior reports on the best &amp; worst ETFs and mutual funds in every sector and style are <a href="http://www.newconstructs.com/nc/research/report/etf-and-fund-reports.htm">here</a>.

		Figure 1 ranks from best to worst the eight mid-cap growth ETFs that meet our liquidity standards and Figure 2 shows the five best and worst-rated mid-cap growth mutual funds. Not all Mid Cap Growth style ETFs and mutual funds are created the same. The number of holdings varies widely (from 21 to 454), which creates drastically different investment implications and ratings. The best ETFs and mutual funds allocate more value to Attractive-or-better-rated stocks than the worst, which allocate too much value to Neutral-or-worse-rated stocks.

		To <a href="http://blog.newconstructs.com/2012/10/09/how-to-find-the-best-etfs-2/">identify the best</a> and <a href="http://blog.newconstructs.com/2012/10/16/how-to-avoid-the-worst-etfs-2/">avoid the worst</a> ETFs and mutual funds within the Mid Cap Growth style, investors need a <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">predictive rating</a> based on (1) <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">stocks ratings</a> of the holdings and (2) the <a href="http://blog.newconstructs.com/2011/10/28/total-annual-costs-methodology/">all-in expenses</a> of each ETF and mutual fund. Investors need not rely on backward-looking ratings. My fund rating methodology is detailed <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">here</a>.

		Investors should not buy any Mid Cap Growth ETFs or mutual funds because none get an Attractive-or-better rating. If you must have exposure to this style, you should buy a basket of Attractive-or-better rated stocks and avoid paying undeserved fund fees. Active management has a <a href="http://blog.newconstructs.com/2012/09/17/less-than-1-of-managers-deliver-alpha-here-are-details/">long history</a> of not paying off.

		Get my ratings on all ETFs and mutual funds in this style on my free <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d911de8114e11e1941500188b533b34">mutual fund and ETF screener</a>.
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			Figure 1: ETFs with the Best &amp; Worst Ratings &ndash; Top 3
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		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapGrowthFig1.jpg"><img alt="" class="aligncenter size-full wp-image-4869" height="224" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapGrowthFig1.jpg" title="MidCapGrowthFig1" width="333" /></a>

		* Best ETFs exclude ETFs with less NAV&rsquo;s less than 100 million.
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			Sources: New Constructs, LLC and company filings
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		ProShares Ultra Russell MidCap Growth (NYSE: <a class="ticker" href="/stock/ukw#NYSE">UKW</a>) and PowerShares RAFI Fundamental Pure Mid Growth Portfolio (NYSE: <a class="ticker" href="/stock/pxmg#NYSE">PXMG</a>) are excluded from Figure 1 because their total net assets (TNA) are below $100 million and do not meet our liquidity standards.
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			Figure 2: Mutual Funds with the Best &amp; Worst Ratings &ndash; Top 5
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		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapGrowthFig2.jpg"><img alt="" class="aligncenter size-full wp-image-4868" height="247" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapGrowthFig2.jpg" title="MidCapGrowthFig2" width="333" /></a>

		* Best mutual funds exclude funds with NAV&rsquo;s less than 100 million.
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			Sources: New Constructs, LLC and company filings
</div>

		<a href="http://bit.ly/REcSpA">Four funds</a> were excluded from Figure 2 because their total net assets (TNA) are below $100 million and do not meet our liquidity standards.

		Vanguard Mid-Cap Growth ETF (NYSE: <a class="ticker" href="/stock/vot#NYSE">VOT</a>) is my top-rated Mid Cap Growth ETF and Nicholas II, Inc. (NYSE: NCTWX) is my top-rated Mid Cap Growth mutual fund. Both earn my Neutral rating.

		First Trust Mid Cap Growth AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fny#NYSE">FNY</a>) is my worst-rated Mid Cap Growth ETF and Bhirud Funds, Inc: Apex Mid Cap Growth Fund (NYSE: BMCGX) is my worst-rated Mid Cap Growth mutual fund. FNY earns my Dangerous, while BMCGX receives my Very Dangerous rating.

		Figure 3 shows that 356 out of the 1417 stocks (over 27% of the total net assets) held by Mid Cap Growth ETFs and mutual funds get an Attractive-or-better rating. However, no Mid Cap Growth ETFs or mutual funds receive an Attractive-or-better rating.

		The key takeaway is: there are Attractive stocks held by Mid Cap Growth funds, but mutual fund managers do a poor job allocating investments to them and ETFs do not hold enough of them.
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			Figure 3: Mid Cap Growth Style Landscape For ETFs, Mutual Funds &amp; Stocks 
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			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapGrowthFig3.jpg"><img alt="" class="aligncenter size-full wp-image-4867" height="156" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapGrowthFig3.jpg" title="MidCapGrowthFig3" width="405" /></a>

			Sources: New Constructs, LLC and company filings
</div>

		As detailed in &ldquo;<a href="http://blog.newconstructs.com/2012/07/20/low-cost-funds-dupe-investors-2/">Cheap Funds Dupe Investors</a>&rdquo;, the fund industry offers many cheap funds but very few funds with high-quality stocks, or with what I call good <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">portfolio management</a>.

		Investors should not buy any Mid Cap Growth ETFs and mutual funds. No Mid Cap Growth ETF or mutual fund allocates enough value to Attractive-or-better-rated stocks to earn an Attractive-or-better rating. Investors seeking exposure to Mid Cap Growth stocks are better off buying Attractive-or-better- rated Mid Cap Growth stocks.

		Patterson Companies, Inc. (NASDAQ: <a class="ticker" href="/stock/pdco#NASDAQ">PDCO</a>) is one of my favorite stocks held by Mid Cap Growth ETFs and mutual funds. It earns my Attractive rating. Patterson is a value-added distributor serving the dental, veterinary, and rehab markets. It has earned positive economic earnings every year in the 15 years covered by my model. Only 6% of the 3000+ companies we cover can match that achievement. In addition, PDCO has grown its economic earnings 14 out of the past 15 years. Considering this growth in profitability, you would think the market would have priced further growth into PDCO&rsquo;s current stock price. Yet, PDCO only trades at a <a href="http://blog.newconstructs.com/2012/06/18/price-to-economic-book-value-or-price-to-ebv/">price-to-economic book value</a> of 1.14. Considering PDCO&rsquo;s record of value creation, market expectations are quite low for a company that generated free cash flow in excess of $260 million last year. For these reasons, I favor this Attractive stock over the Neutral-or-worse rated ETFs and mutual funds in the Mid Cap Value style category.

		Louisiana-Pacific Corporation (NYSE: <a class="ticker" href="/stock/lpx#NYSE">LPX</a>) is one of my least favorite stocks held by Mid Cap Growth ETFs and mutual funds and earns my Dangerous rating. During the past year, LPX stock has risen over 100%, while the S&amp;P500 has risen 17.5%. This has resulted in a forward P/E of 26.6x next year&rsquo;s earnings.&nbsp; This recent outperformance has been great for current shareholders, but it does not make LPX an Attractive investment for prospective shareholders. In addition, LPX has had negative economic earnings for the past 5 years. Even worse, LPX&rsquo;s <a href="http://www.newconstructs.com/nc/help/glossary.htm#nopat">NOPAT</a> has been negative over the past five years as well. Without operating profits, there is no way for LPX to cover its cost of capital. This combination of a steep valuation and poor profitability makes LPX a Dangerous stock.

		Figures 4 and 5 show the rating landscape of all Mid Cap Growth ETFs and mutual funds.

		Our <a href="http://blog.newconstructs.com/2012/10/11/investment-style-rankings-for-etfs-mutual-funds/">style rankings for ETFs and mutual funds</a> report ranks all styles and highlights those that offer the best investments.
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			Figure 4: Separating the Best ETFs From the Worst Funds
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<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapGrowthFig4.jpg"><img alt="" class="aligncenter size-full wp-image-4866" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapGrowthFig4.jpg" title="MidCapGrowthFig4" width="409" /></a>

			Sources: New Constructs, LLC and company filings
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<div>

			Figure 5: Separating the Best Mutual Funds From the Worst Funds
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			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapGrowthFig5.jpg"><img alt="" class="aligncenter size-full wp-image-4865" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapGrowthFig5.jpg" title="MidCapGrowthFig5" width="409" /></a>

			Sources: New Constructs, LLC and company filings
</div>

		Review my <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d911de8114e11e1941500188b533b34">full list</a> of ratings and rankings along with reports on all 10 ETFs and 390 mutual funds in the Mid Cap Growth style.

		Disclosure: I receive no compensation to write about any specific stock, sector, style or&nbsp;theme.
</div>

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