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Is First Trust Growth Strength ETF (FTGS) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Growth category of the market, the First Trust Growth Strength ETF (FTGS - Free Report) is a smart beta exchange traded fund launched on 10/25/2022.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors, and has been able to amass over $415.38 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Growth. FTGS seeks to match the performance of the THE GROWTH STRENGTH INDEX before fees and expenses.
The Growth Strength Index provides exposure to a mix of domestic equities with filters for liquidity, return on equity, long-term debt, revenue and cash flow growth.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for FTGS are 0.60%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.42%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
FTGS's heaviest allocation is in the Information Technology sector, which is about 29.50% of the portfolio. Its Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Nvidia Corporation (NVDA - Free Report) accounts for about 2.73% of the fund's total assets, followed by Valero Energy Corporation (VLO - Free Report) and Meta Platforms Inc. (class A) (META - Free Report) .
Its top 10 holdings account for approximately 23.07% of FTGS's total assets under management.
Performance and Risk
The ETF has added about 10.62% and was up about 34.40% so far this year and in the past one year (as of 06/12/2024), respectively. FTGS has traded between $22.83 and $30.76 during this last 52-week period.
FTGS has a beta of 1.13 and standard deviation of 16.14% for the trailing three-year period. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Growth Strength ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $130.29 billion in assets, Invesco QQQ has $277.82 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
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 Growth Strength ETF (FTGS) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Growth category of the market, the First Trust Growth Strength ETF (FTGS - Free Report) is a smart beta exchange traded fund launched on 10/25/2022.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors, and has been able to amass over $415.38 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Growth. FTGS seeks to match the performance of the THE GROWTH STRENGTH INDEX before fees and expenses.
The Growth Strength Index provides exposure to a mix of domestic equities with filters for liquidity, return on equity, long-term debt, revenue and cash flow growth.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for FTGS are 0.60%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.42%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
FTGS's heaviest allocation is in the Information Technology sector, which is about 29.50% of the portfolio. Its Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Nvidia Corporation (NVDA - Free Report) accounts for about 2.73% of the fund's total assets, followed by Valero Energy Corporation (VLO - Free Report) and Meta Platforms Inc. (class A) (META - Free Report) .
Its top 10 holdings account for approximately 23.07% of FTGS's total assets under management.
Performance and Risk
The ETF has added about 10.62% and was up about 34.40% so far this year and in the past one year (as of 06/12/2024), respectively. FTGS has traded between $22.83 and $30.76 during this last 52-week period.
FTGS has a beta of 1.13 and standard deviation of 16.14% for the trailing three-year period. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Growth Strength ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $130.29 billion in assets, Invesco QQQ has $277.82 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
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.