Why This Wealth Firm Trimmed Its Mid-Cap Exposure by $3 Million

Key Points

Florida-based Fortress Wealth Group sold 27,140 shares of FNX for an estimated $3.3 million during the third quarter. The transaction value represented about 1.4% of reportable assets at quarter-end. Following the sales, Fortress reported holding 11,107 shares of FNX valued at $1.4 million.These 10 stocks could mint the next wave of millionaires ›

Fortress Wealth Group (FWG Holdings) reduced its position in the First Trust Mid Cap Core AlphaDEX Fund (NASDAQ:FNX) in the third quarter, selling an estimated $3.3 million based on average prices during the quarter, according to an SEC filing on Thursday.

What Happened

Florida-based Fortress Wealth Group disclosed in a U.S. Securities and Exchange Commission (SEC) Form 13F filing released on Thursday that it sold 27,140 shares of the First Trust Mid Cap Core AlphaDEX Fund(NASDAQ:FNX) during the third quarter. The estimated value of the sale was $3.3 million. The fund reported holding 11,107 shares worth $1.4 million at the end of the period.

What Else to Know

FWG Holdings' sale reduced its FNX position to 0.6% of reportable 13F assets.

Top holdings following the filing:

NYSEMKT:VUG: $41 million (17.7% of AUM)NYSEMKT:VTV: $28.3 million (12.2% of AUM)NASDAQ:QQQ: $21.6 million (9.3% of AUM) NYSEMKT:FBND: $10.7 million (4.6% of AUM)NYSEMKT:SPY: $8.9 million (3.8% of AUM)

As of Friday, FNX shares were priced at $124.39, up 8% over the past year and underperforming the S&P 500's nearly 20% gain over the same period.

ETF Overview MetricValueAUM$1.2 billionYield0.9%Price (as of market close Friday)$124.391-year price change8%

ETF Snapshot

FNX's investment strategy seeks to generate positive alpha by selecting mid-cap stocks from the NASDAQ US 600 Mid Cap Index using the AlphaDEX® methodology. The portfolio is diversified across U.S. mid-cap equities, with holdings determined by a quantitative selection process. The fund operates as an exchange-traded fund (ETF) with a structured, rules-based approach.

Foolish Take

Fortress Wealth Group’s third-quarter reduction in the First Trust Mid Cap Core AlphaDEX Fund appears to be part of a broader portfolio recalibration, as opposed to a shift away from equities altogether. The Florida-based wealth advisory sold 27,140 shares valued at roughly $3.3 million, according to an SEC filing released Thursday, leaving a smaller $1.4 million position at quarter-end.

FNX—a mid-cap equity with top holdings ETF Bloom Energy Corporation, Symbiotic and Guardant Health—has trailed the broader S&P 500 over the past year, up just 8% versus the benchmark’s nearly 20% gain. For a firm like Fortress, which emphasizes risk management, diversification, and steady growth, the sale may reflect a tactical rotation toward large-cap or income-generating assets, evident in its top holdings such as VUG, VTV, and FBND.

For long-term investors, FNX remains a disciplined way to access the mid-cap space—but recent performance highlights the challenge of factor-driven strategies in momentum-heavy markets. Fortress’ adjustment suggests a pragmatic tilt toward balance and consistency in an evolving rate and earnings environment.

Glossary

13F reportable assets: Assets that institutional investment managers must disclose quarterly to the SEC on Form 13F.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a firm or fund.
AlphaDEX® methodology: A proprietary, rules-based investment strategy that selects and weights stocks based on quantitative factors to seek outperformance.
Mid-cap: Companies with a market capitalization typically between $2 billion and $10 billion.
Exchange-traded fund (ETF): An investment fund traded on stock exchanges, holding a diversified portfolio of assets.
Quantitative selection process: An investment approach using mathematical models and data analysis to choose securities.
Factor-driven selection: Choosing investments based on specific characteristics, such as value or growth, identified by statistical analysis.
Systematic approach: An investment method following a predetermined set of rules or models, minimizing human discretion.
Benchmark: A standard index or measure used to compare the performance of a fund or investment.
Dividend yield: The annual dividend income expressed as a percentage of the investment's current price.

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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Index Funds - Vanguard Growth ETF and Vanguard Index Funds - Vanguard Value ETF. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.