Buy These 3 ETFs Now

If you go by the new 52-week highs and lows from Tuesday’s trading, the bulls are back in control.

Yesterday, the bulls flipped the switch. For the first time in a long time, the new 52-week highs on both the NYSE and the Nasdaq easily outnumbered the new 52-week lows.

I don’t know how long this will last, but it suggests the markets have calmed — the VIX nearing 18 provides some confirmation. But as we’ve learned in 2026, things can change on a dime, so govern yourself accordingly.

Back to the new 52-week highs and lows. On the NYSE, the highs were 126, 14 times the lows, while on the Nasdaq, the highs outnumbered the lows by 289 to 65.

Based on the bullish data, today’s piece will be about a momentum play worth riding for the remainder of 2026 and into 2027.

Small caps have been on my radar since late 2023. While I was clearly too early to the party, the past year has shown they’re a force to be reckoned with and something worth including in your investment portfolio.

Yesterday, three First Trust small-cap ETFs hit new 52-week highs. I’ll decide which of the three is the best buy for long-term investors seeking small-cap exposure.

The First Trust Small Cap Core AlphaDEX Fund (FYX) tracks the Nasdaq AlphaDEX Small Cap Core Index, a collection of small-cap stocks selected from the Nasdaq US 700 Small Cap Index, using the AlphaDEX stock selection methodology.

The process combines growth factors, including price appreciation and sales growth, with value factors such as book-to-price, cash flow-to-price, and return on assets. Each of the 700 stocks is given a growth score and a value score based on the above and other factors.

They divide the 525 highest-scoring stocks into five equal groups based on rank. The best-ranked groups receive greater weight in the index, and all stocks within each group are weighted equally. The index is updated and rebalanced every quarter.

First Trust launched the ETF in May 2007; it has $1.15 billion in net assets spread across 525 companies. It is the largest of the three First Trust small-cap ETFs discussed.

The top 10 holdings account for just 4.07%. With this kind of diversification, you’re not going to hit a home run owning FYX, but you’re less likely to lose your shirt should the current demand for small-cap stocks fade away.

The top three sectors by weight are financials (20.38%), industrials (17.47%), and health care (14.20%). Tech represents just 8.34% of the portfolio.

Based on risk-adjusted returns, Morningstar gives it four stars over the past 10 years, with a 10-year annualized total return of 12.14%.

Yesterday, it hit a new 52-week high of $128.47, the 53rd of the past 12 months. Its shares are up 53% over the past year.

First Trust Small Cap Growth AlphaDEX Fund (FYC) tracks the Nasdaq AlphaDEX Small Cap Growth Index, a collection of small-cap stocks also selected from the Nasdaq US 700 Small Cap Growth Index, using the AlphaDEX stock selection methodology.

First Trust launched the ETF in April 2011 and has $984 million in net assets, spread across 264 companies. It is the second-largest of the three First Trust small-cap ETFs discussed. The top 10 holdings account are 8.1%, double the weight of FYX.

The top three sectors by weight are health care (26.46%), industrials (21.95%), and tech (11.28%). In FYC, financials are weighted at 10.91%, about half of FYX.

Based on risk-adjusted returns, Morningstar gives it four stars over the past 10 years and five stars over the last five years. Its 10- and 5-year annualized total returns are 13.74% and 9.05%, respectively.

Yesterday, it hit a new 52-week high of $106.37, the 66th of the past 12 months. Its shares are up 62% over the past year. Notably, yesterday, it also hit an all-time high.

First Trust Small Cap Value AlphaDEX Fund (FYT) tracks the Nasdaq AlphaDEX Small Cap Value Index, a collection of small-cap stocks also selected from the Nasdaq US 700 Small Cap Value Index, using the AlphaDEX stock selection methodology.

First Trust launched FYT at the same time as FYC in April 2011 and has $162 million in net assets, spread across 262 companies. It is the smallest of the three First Trust small-cap ETFs discussed. That makes sense, given that value stocks have been out of fashion until the past six months to a year.

The top 10 holdings account are 6.78%, a little more than halfway between FYX and FYC.

The top three sectors by weight are financials (26.85%), consumer discretionary (15.34%), and industrials (13.29%). In FYT, the health care weight is just 5.92%, well below those of FYX and FYC.

Morningstar doesn’t rate it. That’s likely due to the small asset base.  Its 10- and 5-year annualized total returns are 10.25% and 6.48%, respectively.

Yesterday, it hit a new 52-week high of $65.08, the 45th of the past 12 months. Its shares are up 45% over the past year. FYT also hit an all-time high yesterday.

Whenever investors consider buying ETFs, fees are an important consideration. FYX’s total expense ratio is 0.58%, while FYC and FYT are 12 basis points higher. That difference partly explains why FYX has attracted the most assets of the three.

Interestingly, the three ETFs’ 10-year annualized total returns line up perfectly, with FYX’s at 12.14%, 189 basis points higher than FYT, and 160 basis points below FYC. That’s what you want and expect to happen from core, growth, and value funds.

So, if cost is your most important criterion for choosing an ETF, then you’ll want to go with FYX. However, if cost isn’t a dealbreaker, then you’ve got to decide between value and growth. This April 1 article from Royce Investment Partners does a good job on the subject.

“For the third consecutive quarter, the Russell 2000 Value Index beat the Russell 2000 Growth Index, up 5.0% versus a loss of -2.8% in 1Q26,” writes Royce’s Co-Chief Investment Officer Francis Gannon.

“Unlike small-cap value’s advantages in the last two quarters of 2025, results in the first quarter were more in line with each style index’s long-running historical patterns: small-cap growth typically outperforms in fast growing or earnings-starved market climates while small-cap value usually outperforms in down markets or when the economy is expanding.”

I think it’s fair to say we aren’t in fast-growing or earnings-starved markets, but more likely leaning into a down market in the second half of 2026 — although the S&P 500 is now in positive territory for the year — so FYT looks to be slightly more attractive at this point in the economic cycle.

Over the long haul, however, I don’t think you can go wrong owning any of FTX, FYC, and FYT.

On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com