FNY uses the AlphaDex methodology to rank and select growth stocks from the S&P 400 Index based on price appreciation, sales to price ratios, and sales growth, and then weights them equally within quintiles. The index rescreens each security twice, by both growth and value characteristics, assigning whatever score is highest as the stock's style score. FNY selects and ranks the top 250 growth stocks for the portfolio, then tiered equal-weighting is applied to the top 75% of securities. Its weighting scheme leads to a perpetual small-cap tilt, which along with sector biases, raises the fund's market risk. The index is reconstituted and rebalanced quarterly. Effective April 8, 2016, the fund switched underlying indexes from the old defined index to the current Nasdaq version. The index universe may differ slightly but the factors and methodology are the same.
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