FYC vs VUG

FYCCFirst Trust Small Cap Growth AlphaDEX Fund

VUGAVanguard Morningstar Growth ETF

In short

FYC Small-cap growth, but not by market cap. The AlphaDEX screen ranks the Nasdaq US 700 Small Cap universe on growth and value factors, keeps the best scorers, tiers their weights by rank, and reshuffles quarterly. Rules-based stock picking, not index hugging.

VUG Three basis points buys roughly 170 US large-cap growth names. Running since 2004, over $100 billion in assets, and it tracks its index about as closely as an index fund can.

Stated mandate

FYC The fund seeks to track, before fees and expenses, the price and yield performance of the Nasdaq AlphaDEX Small Cap Growth Index through an indexing approach.

VUG The fund seeks to track a benchmark index measuring the investment return of large-capitalization growth stocks.

Why people hold it

• FYC Weight follows score, not size: selected names are split into quintiles, higher-scoring quintiles get the bigger share of the index, and stocks sit equal-weighted inside each quintile.sec.gov
• The screen blends both sides of the style aisle, ranking on growth factors (3-, 6- and 12-month price moves, sales-to-price, sales growth) and value factors (book-to-price, cash-flow-to-price, return on assets).sec.gov
• The index is reconstituted and rebalanced quarterly, so the roughly 300 small caps it holds get re-scored four times a year instead of riding a static list.sec.gov
• Live since 2011 and now a multi-billion-dollar fund, meaning this methodology has been run through more than one small-cap boom and bust rather than back-tested through them.

• VUG 0.03% a year against a 0.18% median for its growth peer group. A rival tracking the same declared index charges 0.36%, twelve times more for the same shopping list.vanguard.com
• One of the largest and most heavily traded funds in US large-cap growth, and among the tightest index implementations in that group. Deep volume tends to mean thin spreads.
• Trading since January 2004, so the record spans full market cycles rather than a backtest. Distributions land quarterly.

Worth knowing

• FYC Cost is the headline trade-off: 0.70% a year, well above the typical fund in its growth peer group, where cap-weighted options like SPYG, SCHG and VUG run at or below 0.04%.
• The prospectus flags that the quarterly reconstitution schedule may produce a higher rate of portfolio turnover, with the trading costs and in-fund capital gains that can come with it.sec.gov
• Because weights ignore market cap, the fund can concentrate in an industry group when its index does, and it trades only moderately, so spreads deserve a look before you place an order.sec.gov

• VUG Cap-weighted, so the biggest mega-caps dominate the top of the book. That makes it one of the more concentrated portfolios in this cohort.vanguard.com
• A style sleeve, not the whole market: growth screens only, large caps only. When growth is out of favor it can swing harder than a total-market fund.
• SPYG and SCHG sit at 0.04%, so the price edge is a rounding error. The real gap is how each index defines a growth stock.

Full FYC profile⁠

Full VUG profile⁠