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Should You Invest in the First Trust NYSE Arca Biotechnology ETF (FBT)?
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Launched on 06/19/2006, the First Trust NYSE Arca Biotechnology ETF (FBT - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Biotech segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Healthcare - Biotech is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.46 billion, making it one of the larger ETFs attempting to match the performance of the Healthcare - Biotech segment of the equity market. FBT seeks to match the performance of the NYSE Arca Biotechnology Index before fees and expenses.
The NYSE Arca Biotechnology Index is an equal dollar weighted index designed to measure the performance of a cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.55%, making it on par with most peer products in the space.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Seagen Inc. accounts for about 5.39% of total assets, followed by Regeneron Pharmaceuticals, Inc. (REGN - Free Report) and Exelixis, Inc. (EXEL - Free Report) .
The top 10 holdings account for about 38.29% of total assets under management.
Performance and Risk
Year-to-date, the First Trust NYSE Arca Biotechnology ETF has lost about -0.01% so far, and is up about 16.49% over the last 12 months (as of 05/26/2023). FBT has traded between $123.32 and $165.37 in this past 52-week period.
The ETF has a beta of 0.79 and standard deviation of 23.58% for the trailing three-year period, making it a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NYSE Arca Biotechnology ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FBT, then, is not a great choice for investors seeking exposure to the Health Care ETFs segment of the market. However, there are better ETFs in the space to consider.
SPDR S&P Biotech ETF (XBI - Free Report) tracks S&P Biotechnology Select Industry Index and the iShares Biotechnology ETF (IBB - Free Report) tracks Nasdaq Biotechnology Index. SPDR S&P Biotech ETF has $6.24 billion in assets, iShares Biotechnology ETF has $7.61 billion. XBI has an expense ratio of 0.35% and IBB charges 0.44%.
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 NYSE Arca Biotechnology ETF (FBT)?
Launched on 06/19/2006, the First Trust NYSE Arca Biotechnology ETF (FBT - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Biotech segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Healthcare - Biotech is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.46 billion, making it one of the larger ETFs attempting to match the performance of the Healthcare - Biotech segment of the equity market. FBT seeks to match the performance of the NYSE Arca Biotechnology Index before fees and expenses.
The NYSE Arca Biotechnology Index is an equal dollar weighted index designed to measure the performance of a cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.55%, making it on par with most peer products in the space.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Seagen Inc. accounts for about 5.39% of total assets, followed by Regeneron Pharmaceuticals, Inc. (REGN - Free Report) and Exelixis, Inc. (EXEL - Free Report) .
The top 10 holdings account for about 38.29% of total assets under management.
Performance and Risk
Year-to-date, the First Trust NYSE Arca Biotechnology ETF has lost about -0.01% so far, and is up about 16.49% over the last 12 months (as of 05/26/2023). FBT has traded between $123.32 and $165.37 in this past 52-week period.
The ETF has a beta of 0.79 and standard deviation of 23.58% for the trailing three-year period, making it a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NYSE Arca Biotechnology ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FBT, then, is not a great choice for investors seeking exposure to the Health Care ETFs segment of the market. However, there are better ETFs in the space to consider.
SPDR S&P Biotech ETF (XBI - Free Report) tracks S&P Biotechnology Select Industry Index and the iShares Biotechnology ETF (IBB - Free Report) tracks Nasdaq Biotechnology Index. SPDR S&P Biotech ETF has $6.24 billion in assets, iShares Biotechnology ETF has $7.61 billion. XBI has an expense ratio of 0.35% and IBB charges 0.44%.
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.