First Trust Mid Cap Value AlphaDEX Fund (NASDAQ: FNK)

Latest news for First Trust Mid Cap Value AlphaDEX Fund (NASDAQ:FNK)

First Trust Mid Cap Value AlphaDEX Fund

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The Fund will normally invest at least 90 percent of its net assets (including investment borrowings) in the securities that comprise the Index. The Fund, using an indexing investment approach, attempts to replicate, before fees and expenses, the performance of the Index. The Index is owned and is developed, maintained and sponsored by Nasdaq, Inc. (the Index Provider). The Index Provider may, from time to time, exercise reasonable discretion as it deems appropriate in order to maintain Index integrity.

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PVH Corp. (NYSE: PVH) reported Q3 results above guidance but gave soft guidance for Q4, with sales expected to decrease by 6-7% and adjusted EPS of $3.05-$3.20. The company also repurchased shares worth $29 million and expects to repurchase $400 million for the full year 2024. 

Calvin Klein Parent PVH Falls As Q3 Beats Are Derailed By Soft Guidance

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Best &amp; Worst ETFs and Mutual Funds: Mid-cap Value Style

Funko Inc

PVH Corp.&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PVH#NYSE">PVH</a>) shares are trading lower after the company reported&nbsp;third-quarter&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/12/b42329586/pvh-corp-reports-2024-third-quarter-revenue-and-earnings-above-guidance" rel="noreferrer noopener">results and provided soft guidance</a>.
Sales came in at&nbsp;$2.255 billion, which beat the analyst consensus estimate of $2.220 billion.
Revenue in the company&#8217;s international businesses was flat year over year and down 2% on a constant currency basis.
Growth in the Asia Pacific region in local currency was offset by a strategic reduction in sales in Europe, aimed at driving higher-quality sales in the region.
In North America, revenue from the Tommy Hilfiger and Calvin Klein brands decreased by 6% year over year, partly due to a shift in wholesale shipments from the fourth quarter to the third quarter of the prior year.
Direct-to-consumer revenue was flat Y/Y (-1% Y/Y in constant currency).
Owned store revenue increased 1% year over year, while digital commerce revenue decreased 1% year over year (-3% year over year in constant currency), impacted by the strategic sales reduction in Europe.
Wholesale revenue declined 8% year over year (-9% year over year in constant currency), with a 4% year-over-year drop from the sale of the Heritage Brands women&#8217;s intimates business and the rest due to the reduction in Europe sales and North American shipment timing.
Gross margin improved by 170 basis points year over year to 58.4%, led by a favorable shift in channel mix and reduced sales to lower-margin wholesale accounts.
Adjusted EPS of $3.03&nbsp;per share, which beat the <a target="_blank" href="https://www.benzinga.com/earnings" rel="noreferrer noopener">analyst consensus estimate of&nbsp;$2.59</a>.
Stefan Larsson, Chief Executive Officer, said, "Throughout the quarter, we drove powerful consumer engagement for both Calvin Klein and TOMMY HILFIGER, and continued to build momentum in product, with significantly improved sell-throughs for the Fall 24 season across all regions and both our iconic brands, and we are coming into the holiday season with a fresh and strong inventory composition."
Buyback: Under the PVH+ Plan, the company repurchased shares worth $29 million in the third quarter of 2024, bringing total repurchases for the first nine months to 2.4 million shares for $254 million.
The company expects to repurchase around $400 million in common stock for 2024.
Outlook:&nbsp;PVH expects&nbsp;fourth-quarter&nbsp;revenue to decrease by&nbsp;6%&nbsp;to&nbsp;7%&nbsp;and sees adjusted EPS of $3.05 to<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener"> $3.20 vs. estimate of $3.71</a>.
The company reaffirmed the fiscal year 2024 revenue decrease of&nbsp;6%&nbsp;to&nbsp;7%&nbsp;and revised adjusted EPS to&nbsp;$11.55-$11.70 (from&nbsp;$11.55-$11.80)<a target="_blank" href="https://www.benzinga.com//node/40589325" rel="noreferrer noopener"> versus the estimate of&nbsp;$11.73</a>.
Investors can gain exposure to the stock via First Trust Cons. Discret. AlphaDEX (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXD#NYSE">FXD</a>) and First Trust Mid Cap Value AlphaDEX Fund (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FNK#NASDAQ">FNK</a>).
Price Action: PVH shares are down 2.5% at $109.98 at last check Thursday.
Read Also:
<ul>
<li><a href="https://www.benzinga.com/economics/macro-economic-events/24/12/42323280/tech-stocks-extend-record-highs-on-ai-optimism-marvell-rockets-bitcoin-hovers-near-95000-whats-driving-markets-wednesday" target="_blank" rel="noreferrer noopener">Tech Stocks Extend Record Highs On AI Optimism, Marvell Rockets, Bitcoin Hovers Near $95,000: What&#8217;s Driving Markets Wednesday?</a></li>
</ul>
Photo: Shutterstock

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IPOs Expected Evoqua Water Technologies (AQUA), Funko (FNKO), Allena Pharmaceuticals (ALNA), Energy Hunter Resources (EHR), and Spero Therapeutics (SPRO)

<div class="entry-content">

		The mid-cap value style ranks tenth 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 12 ETFs and 176 mutual funds in the mid-cap value style as of October 22, 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>.

		Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the style. Not all mid-cap value style ETFs and mutual funds are created the same. The number of holdings varies widely (from 25 to 662), 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 value 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 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=5d913e68114e11e18f0900188b533b34">mutual fund and ETF screener</a>.
<div>

			Figure 1: ETFs with the Best &amp; Worst Ratings &ndash; Top 5
</div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig1.jpg"><img alt="" class="aligncenter size-full wp-image-4913" height="246" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig1.jpg" title="MidCapValueFig1" width="338" /></a>

		* Best ETFs exclude ETFs with NAV&rsquo;s less than 100 million.
<div>

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

		First Trust Mid Cap Value AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fnk#NYSE">FNK</a>) and Rydex S&amp;P Midcap 400 Pure Value (RFV) are excluded from Figure 1 because their total net assets (TNA) are below $100 million and do not meet our liquidity standards.
<div>

			Figure 2: Mutual Funds with the Best &amp; Worst Ratings &ndash; Top 5
</div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig2.jpg"><img alt="" class="aligncenter size-full wp-image-4912" height="248" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig2.jpg" title="MidCapValueFig2" width="338" /></a>

		* Best mutual funds exclude funds with NAV&rsquo;s less than 100 million.
<div>

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

		<a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm">Six mutual funds</a> are excluded from Figure 2 because their total net assets (TNA) are below $100 million and do not meet our liquidity standards.

		WisdomTree MidCap Earnings Fund (NYSE: <a class="ticker" href="/stock/ezm#NYSE">EZM</a>) is my top-rated mid-cap value ETF and Artisan Partners Fund, Inc.: Artisan Mid Cap Value Fund (NYSE: APHQX) is my top-rated mid-cap value mutual fund. Both earn my Neutral rating.

		SPDR S&amp;P400 Mid Cap Value ETF (NYSE: <a class="ticker" href="/stock/mdyv#NYSE">MDYV</a>) is my worst-rated mid-cap value ETF and Transamerica Funds: Transamerica Small/Mid Cap Value (NYSE: IIVAX) is my worst-rated mid-cap value mutual fund. Both earn a Dangerous-or-below rating.

		Figure 3 shows that 386 out of the 1,513 stocks (over 29% of the total net assets) held by mid-cap value ETFs and mutual funds get an Attractive-or-better rating. However, none of the 12 mid-cap value ETFs or 176 mid-cap value mutual funds get an Attractive-or-better rating.

		The takeaways are: mutual fund managers allocate too much capital to low-quality stocks and mid-cap value ETFs hold poor quality stocks.
<div>

			Figure 3: Mid-cap Value Style Landscape For ETFs, Mutual Funds &amp; Stocks
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig3.jpg"><img alt="" class="aligncenter size-full wp-image-4911" height="147" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig3.jpg" title="MidCapValueFig3" width="401" /></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 need to tread carefully when considering mid-cap value ETFs and mutual funds, as no ETF or mutual funds in the mid-cap value style allocate enough value to Attractive-or-better-rated stocks to earn an Attractive rating. Investors should focus on individual stocks instead. Here are two very different stocks that are held by mid-cap value mutual funds.

		The Progressive Corp (NYSE: <a class="ticker" href="/stock/pgr#NYSE">PGR</a>) is one of my favorite stocks held my mid-cap value funds. PGR receives my Very Attractive rating. PGR has generated positive <a href="http://www.newconstructs.com/nc/help/glossary.htm#epDef">economic earnings&nbsp;</a>eleven out of the past fourteen years. In 2011 they produced an <a href="http://www.newconstructs.com/nc/help/glossary.htm#rarDef">economic earnings margin</a>&nbsp;of 10.5%. This ranks in the 89th percentile of all 3000+ companies in our coverage universe. This level of profitability places PGR among the elite, however the market prices its stock amongst the cheapest. PGR currently 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&nbsp;</a>of 1.0; this implies the company will never grow its <a href="http://www.newconstructs.com/nc/help/glossary.htm#nopat">after-tax operating earnings (NOPAT)</a> beyond current levels. &nbsp;Over the past ten years, PGR has grown its <a href="http://www.newconstructs.com/nc/help/glossary.htm#nopat">after-tax operating earnings&nbsp;</a>9% compounded annually. Given the company&rsquo;s past, the market appears overly pessimistic about its future. The market&rsquo;s low stock price coupled with PGR&rsquo;s high profitability make it a Very Attractive stock.

		Equity Lifestyle Properties, Inc. (NYSE: <a class="ticker" href="/stock/els#NYSE">ELS</a>) is one of my least favorite stocks held by mid-cap value funds. It receives my Very Dangerous rating. ELS is a value-destroyer. Over the past fourteen years, ELS has never produced positive <a href="http://www.newconstructs.com/nc/help/glossary.htm#epDef">economic earnings</a>. Many investors have flocked into REITs as they offer high dividend yields in this low interest rate environment. In seeking this income, they have bid up the price of REITs to the point where they have put their principal at risk. To justify ELS&rsquo;s stock price of $67.58, the company would have to grow its <a href="http://www.newconstructs.com/nc/help/glossary.htm#nopat">after-tax operating earnings&nbsp;(NOPAT)</a> at 15%, compounded annually, for the next fourteen years. It is not worth purchasing shares of ELS for its 2.60% dividend yield when the downside risk is so large.

		Figures 4 and 5 show the rating landscape of all mid-cap value 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.
<div>

			Figure 4: Separating the Best ETFs From the Worst Funds
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig4.jpg"><img alt="" class="aligncenter size-full wp-image-4910" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig4.jpg" title="MidCapValueFig4" width="409" /></a>

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

			Figure 5: Separating the Best Mutual Funds From the Worst Funds
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig5.jpg"><img alt="" class="aligncenter size-full wp-image-4909" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig5.jpg" title="MidCapValueFig5" 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=5d913e68114e11e18f0900188b533b34">full list</a> of ratings and rankings along with reports on all 12 ETFs and 176 mutual funds in the mid-cap value style.

		Disclosure: I do not own any of the stocks, ETFs or mutual funds in this report.&nbsp; I receive no compensation to write about any specific stock, sector, style or&nbsp;theme.
</div>

Best & Worst ETFs and Mutual Funds: Mid-cap Value Style

PVH Corp.&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PVH#NYSE">PVH</a>) shares are trading lower after the company reported&nbsp;third-quarter&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/12/b42329586/pvh-corp-reports-2024-third-quarter-revenue-and-earnings-above-guidance" rel="noreferrer noopener">results and provided soft guidance</a>.



Sales came in at&nbsp;$2.255 billion, which beat the analyst consensus estimate of $2.220 billion.



Revenue in the company&#8217;s international businesses was flat year over year and down 2% on a constant currency basis.



Growth in the Asia Pacific region in local currency was offset by a strategic reduction in sales in Europe, aimed at driving higher-quality sales in the region.



In North America, revenue from the Tommy Hilfiger and Calvin Klein brands decreased by 6% year over year, partly due to a shift in wholesale shipments from the fourth quarter to the third quarter of the prior year.



Direct-to-consumer revenue was flat Y/Y (-1% Y/Y in constant currency).



Owned store revenue increased 1% year over year, while digital commerce revenue decreased 1% year over year (-3% year over year in constant currency), impacted by the strategic sales reduction in Europe.



Wholesale revenue declined 8% year over year (-9% year over year in constant currency), with a 4% year-over-year drop from the sale of the Heritage Brands women&#8217;s intimates business and the rest due to the reduction in Europe sales and North American shipment timing.



Gross margin improved by 170 basis points year over year to 58.4%, led by a favorable shift in channel mix and reduced sales to lower-margin wholesale accounts.



Adjusted EPS of $3.03&nbsp;per share, which beat the <a target="_blank" href="https://www.benzinga.com/earnings" rel="noreferrer noopener">analyst consensus estimate of&nbsp;$2.59</a>.



Stefan Larsson, Chief Executive Officer, said, "Throughout the quarter, we drove powerful consumer engagement for both Calvin Klein and TOMMY HILFIGER, and continued to build momentum in product, with significantly improved sell-throughs for the Fall 24 season across all regions and both our iconic brands, and we are coming into the holiday season with a fresh and strong inventory composition."



Buyback: Under the PVH+ Plan, the company repurchased shares worth $29 million in the third quarter of 2024, bringing total repurchases for the first nine months to 2.4 million shares for $254 million.



The company expects to repurchase around $400 million in common stock for 2024.



Outlook:&nbsp;PVH expects&nbsp;fourth-quarter&nbsp;revenue to decrease by&nbsp;6%&nbsp;to&nbsp;7%&nbsp;and sees adjusted EPS of $3.05 to<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener"> $3.20 vs. estimate of $3.71</a>.



The company reaffirmed the fiscal year 2024 revenue decrease of&nbsp;6%&nbsp;to&nbsp;7%&nbsp;and revised adjusted EPS to&nbsp;$11.55-$11.70 (from&nbsp;$11.55-$11.80)<a target="_blank" href="https://www.benzinga.com//node/40589325" rel="noreferrer noopener"> versus the estimate of&nbsp;$11.73</a>.



Investors can gain exposure to the stock via First Trust Cons. Discret. AlphaDEX (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXD#NYSE">FXD</a>) and First Trust Mid Cap Value AlphaDEX Fund (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FNK#NASDAQ">FNK</a>).



Price Action: PVH shares are down 2.5% at $109.98 at last check Thursday.



Read Also:



<ul>
<li><a href="https://www.benzinga.com/economics/macro-economic-events/24/12/42323280/tech-stocks-extend-record-highs-on-ai-optimism-marvell-rockets-bitcoin-hovers-near-95000-whats-driving-markets-wednesday" target="_blank" rel="noreferrer noopener">Tech Stocks Extend Record Highs On AI Optimism, Marvell Rockets, Bitcoin Hovers Near $95,000: What&#8217;s Driving Markets Wednesday?</a></li>
</ul>



Photo: Shutterstock

<div class="entry-content">
	
		The mid-cap value style ranks tenth 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 12 ETFs and 176 mutual funds in the mid-cap value style as of October 22, 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>.
	
		Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the style. Not all mid-cap value style ETFs and mutual funds are created the same. The number of holdings varies widely (from 25 to 662), 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 value 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 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=5d913e68114e11e18f0900188b533b34">mutual fund and ETF screener</a>.
	<div>
		
			Figure 1: ETFs with the Best &amp; Worst Ratings &ndash; Top 5
	</div>
	
		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig1.jpg"><img alt="" class="aligncenter size-full wp-image-4913" height="246" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig1.jpg" title="MidCapValueFig1" width="338" /></a>
	
		* Best ETFs exclude ETFs with NAV&rsquo;s less than 100 million.
	<div>
		
			Sources: New Constructs, LLC and company filings
	</div>
	
		First Trust Mid Cap Value AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fnk#NYSE">FNK</a>) and Rydex S&amp;P Midcap 400 Pure Value (RFV) are excluded from Figure 1 because their total net assets (TNA) are below $100 million and do not meet our liquidity standards.
	<div>
		
			Figure 2: Mutual Funds with the Best &amp; Worst Ratings &ndash; Top 5
	</div>
	
		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig2.jpg"><img alt="" class="aligncenter size-full wp-image-4912" height="248" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig2.jpg" title="MidCapValueFig2" width="338" /></a>
	
		* Best mutual funds exclude funds with NAV&rsquo;s less than 100 million.
	<div>
		
			Sources: New Constructs, LLC and company filings
	</div>
	
		<a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm">Six mutual funds</a> are excluded from Figure 2 because their total net assets (TNA) are below $100 million and do not meet our liquidity standards.
	
		WisdomTree MidCap Earnings Fund (NYSE: <a class="ticker" href="/stock/ezm#NYSE">EZM</a>) is my top-rated mid-cap value ETF and Artisan Partners Fund, Inc.: Artisan Mid Cap Value Fund (NYSE: APHQX) is my top-rated mid-cap value mutual fund. Both earn my Neutral rating.
	
		SPDR S&amp;P400 Mid Cap Value ETF (NYSE: <a class="ticker" href="/stock/mdyv#NYSE">MDYV</a>) is my worst-rated mid-cap value ETF and Transamerica Funds: Transamerica Small/Mid Cap Value (NYSE: IIVAX) is my worst-rated mid-cap value mutual fund. Both earn a Dangerous-or-below rating.
	
		Figure 3 shows that 386 out of the 1,513 stocks (over 29% of the total net assets) held by mid-cap value ETFs and mutual funds get an Attractive-or-better rating. However, none of the 12 mid-cap value ETFs or 176 mid-cap value mutual funds get an Attractive-or-better rating.
	
		The takeaways are: mutual fund managers allocate too much capital to low-quality stocks and mid-cap value ETFs hold poor quality stocks.
	<div>
		
			Figure 3: Mid-cap Value Style Landscape For ETFs, Mutual Funds &amp; Stocks
	</div>
	<div>
		
			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig3.jpg"><img alt="" class="aligncenter size-full wp-image-4911" height="147" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig3.jpg" title="MidCapValueFig3" width="401" /></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 need to tread carefully when considering mid-cap value ETFs and mutual funds, as no ETF or mutual funds in the mid-cap value style allocate enough value to Attractive-or-better-rated stocks to earn an Attractive rating. Investors should focus on individual stocks instead. Here are two very different stocks that are held by mid-cap value mutual funds.
	
		The Progressive Corp (NYSE: <a class="ticker" href="/stock/pgr#NYSE">PGR</a>) is one of my favorite stocks held my mid-cap value funds. PGR receives my Very Attractive rating. PGR has generated positive <a href="http://www.newconstructs.com/nc/help/glossary.htm#epDef">economic earnings&nbsp;</a>eleven out of the past fourteen years. In 2011 they produced an <a href="http://www.newconstructs.com/nc/help/glossary.htm#rarDef">economic earnings margin</a>&nbsp;of 10.5%. This ranks in the 89th percentile of all 3000+ companies in our coverage universe. This level of profitability places PGR among the elite, however the market prices its stock amongst the cheapest. PGR currently 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&nbsp;</a>of 1.0; this implies the company will never grow its <a href="http://www.newconstructs.com/nc/help/glossary.htm#nopat">after-tax operating earnings (NOPAT)</a> beyond current levels. &nbsp;Over the past ten years, PGR has grown its <a href="http://www.newconstructs.com/nc/help/glossary.htm#nopat">after-tax operating earnings&nbsp;</a>9% compounded annually. Given the company&rsquo;s past, the market appears overly pessimistic about its future. The market&rsquo;s low stock price coupled with PGR&rsquo;s high profitability make it a Very Attractive stock.
	
		Equity Lifestyle Properties, Inc. (NYSE: <a class="ticker" href="/stock/els#NYSE">ELS</a>) is one of my least favorite stocks held by mid-cap value funds. It receives my Very Dangerous rating. ELS is a value-destroyer. Over the past fourteen years, ELS has never produced positive <a href="http://www.newconstructs.com/nc/help/glossary.htm#epDef">economic earnings</a>. Many investors have flocked into REITs as they offer high dividend yields in this low interest rate environment. In seeking this income, they have bid up the price of REITs to the point where they have put their principal at risk. To justify ELS&rsquo;s stock price of $67.58, the company would have to grow its <a href="http://www.newconstructs.com/nc/help/glossary.htm#nopat">after-tax operating earnings&nbsp;(NOPAT)</a> at 15%, compounded annually, for the next fourteen years. It is not worth purchasing shares of ELS for its 2.60% dividend yield when the downside risk is so large.
	
		Figures 4 and 5 show the rating landscape of all mid-cap value 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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			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig4.jpg"><img alt="" class="aligncenter size-full wp-image-4910" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig4.jpg" title="MidCapValueFig4" width="409" /></a>
		
			Sources: New Constructs, LLC and company filings
	</div>
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			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/MidCapValueFig5.jpg"><img alt="" class="aligncenter size-full wp-image-4909" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/MidCapValueFig5.jpg" title="MidCapValueFig5" 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=5d913e68114e11e18f0900188b533b34">full list</a> of ratings and rankings along with reports on all 12 ETFs and 176 mutual funds in the mid-cap value style.
	
		Disclosure: I do not own any of the stocks, ETFs or mutual funds in this report.&nbsp; I receive no compensation to write about any specific stock, sector, style or&nbsp;theme.
</div>

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