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Is First Trust NASDAQ Bank ETF (FTXO) a Strong ETF Right Now?
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The First Trust NASDAQ Bank ETF (FTXO - Free Report) made its debut on 09/20/2016, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by First Trust Advisors, FTXO has amassed assets over $373.18 million, making it one of the average sized ETFs in the Financials ETFs. FTXO seeks to match the performance of the Nasdaq US Smart Banks Index before fees and expenses.
The Nasdaq US Smart Banks Index is a modified factor weighted index, designed to provide exposure to US companies within the banking industry.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for FTXO are 0.60%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.61%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For FTXO, it has heaviest allocation in the Financials sector --about 100% of the portfolio.
Taking into account individual holdings, Popular, Inc. (BPOP - Free Report) accounts for about 8.87% of the fund's total assets, followed by Citizens Financial Group, Inc. (CFG - Free Report) and Regions Financial Corporation (RF - Free Report) .
The top 10 holdings account for about 61% of total assets under management.
Performance and Risk
So far this year, FTXO has lost about -1.19%, and is up about 6.10% in the last one year (as of 03/22/2022). During this past 52-week period, the fund has traded between $28.60 and $37.
FTXO has a beta of 1.24 and standard deviation of 39.64% for the trailing three-year period. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Bank ETF is an excellent option for investors seeking to outperform the Financials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Invesco KBW Bank ETF (KBWB - Free Report) tracks KBW Nasdaq Bank index and the SPDR S&P Bank ETF (KBE - Free Report) tracks S&P Banks Select Industry Index. Invesco KBW Bank ETF has $2.90 billion in assets, SPDR S&P Bank ETF has $3.10 billion. KBWB has an expense ratio of 0.35% and KBE charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Financials ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is First Trust NASDAQ Bank ETF (FTXO) a Strong ETF Right Now?
The First Trust NASDAQ Bank ETF (FTXO - Free Report) made its debut on 09/20/2016, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by First Trust Advisors, FTXO has amassed assets over $373.18 million, making it one of the average sized ETFs in the Financials ETFs. FTXO seeks to match the performance of the Nasdaq US Smart Banks Index before fees and expenses.
The Nasdaq US Smart Banks Index is a modified factor weighted index, designed to provide exposure to US companies within the banking industry.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for FTXO are 0.60%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.61%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For FTXO, it has heaviest allocation in the Financials sector --about 100% of the portfolio.
Taking into account individual holdings, Popular, Inc. (BPOP - Free Report) accounts for about 8.87% of the fund's total assets, followed by Citizens Financial Group, Inc. (CFG - Free Report) and Regions Financial Corporation (RF - Free Report) .
The top 10 holdings account for about 61% of total assets under management.
Performance and Risk
So far this year, FTXO has lost about -1.19%, and is up about 6.10% in the last one year (as of 03/22/2022). During this past 52-week period, the fund has traded between $28.60 and $37.
FTXO has a beta of 1.24 and standard deviation of 39.64% for the trailing three-year period. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Bank ETF is an excellent option for investors seeking to outperform the Financials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Invesco KBW Bank ETF (KBWB - Free Report) tracks KBW Nasdaq Bank index and the SPDR S&P Bank ETF (KBE - Free Report) tracks S&P Banks Select Industry Index. Invesco KBW Bank ETF has $2.90 billion in assets, SPDR S&P Bank ETF has $3.10 billion. KBWB has an expense ratio of 0.35% and KBE charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Financials ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.