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Should You Invest in the First Trust NASDAQ Semiconductor ETF (FTXL)?
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Looking for broad exposure to the Technology - Semiconductors segment of the equity market? You should consider the First Trust NASDAQ Semiconductor ETF (FTXL - Free Report) , a passively managed exchange traded fund launched on 09/20/2016.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Semiconductors is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $473.82 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Semiconductors segment of the equity market. FTXL seeks to match the performance of the Nasdaq US Smart Semiconductor Index before fees and expenses.
The Nasdaq US Smart Semiconductor Index is a modified factor weighted index, designed to provide exposure to US companies within the semiconductor industry.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.78%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 99.40% of the portfolio.
Looking at individual holdings, Broadcom Inc. (AVGO - Free Report) accounts for about 8.36% of total assets, followed by Intel Corporation (INTC - Free Report) and Texas Instruments Incorporated (TXN - Free Report) .
The top 10 holdings account for about 60.78% of total assets under management.
Performance and Risk
The ETF return is roughly 19.78% so far this year and is down about -13.10% in the last one year (as of 03/30/2023). In that past 52-week period, it has traded between $46.03 and $70.40.
The ETF has a beta of 1.28 and standard deviation of 36.75% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Semiconductor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FTXL is a reasonable option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $7.61 billion in assets, VanEck Semiconductor ETF has $7.86 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.
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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Should You Invest in the First Trust NASDAQ Semiconductor ETF (FTXL)?
Looking for broad exposure to the Technology - Semiconductors segment of the equity market? You should consider the First Trust NASDAQ Semiconductor ETF (FTXL - Free Report) , a passively managed exchange traded fund launched on 09/20/2016.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Semiconductors is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $473.82 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Semiconductors segment of the equity market. FTXL seeks to match the performance of the Nasdaq US Smart Semiconductor Index before fees and expenses.
The Nasdaq US Smart Semiconductor Index is a modified factor weighted index, designed to provide exposure to US companies within the semiconductor industry.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.78%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 99.40% of the portfolio.
Looking at individual holdings, Broadcom Inc. (AVGO - Free Report) accounts for about 8.36% of total assets, followed by Intel Corporation (INTC - Free Report) and Texas Instruments Incorporated (TXN - Free Report) .
The top 10 holdings account for about 60.78% of total assets under management.
Performance and Risk
The ETF return is roughly 19.78% so far this year and is down about -13.10% in the last one year (as of 03/30/2023). In that past 52-week period, it has traded between $46.03 and $70.40.
The ETF has a beta of 1.28 and standard deviation of 36.75% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Semiconductor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FTXL is a reasonable option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $7.61 billion in assets, VanEck Semiconductor ETF has $7.86 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.
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.