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Is First Trust Growth Strength ETF (FTGS) a Strong ETF Right Now?
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A smart beta exchange traded fund, the First Trust Growth Strength ETF (FTGS - Free Report) debuted on 10/25/2022, and offers broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $609.81 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. FTGS is managed by First Trust Advisors. This particular fund 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.60%.
FTGS's 12-month trailing dividend yield is 0.35%.
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.
For FTGS, it has heaviest allocation in the Information Technology sector --about 31.50% of the portfolio --while Financials and Industrials round out the top three.
Taking into account individual holdings, W.r. Berkley Corporation (WRB - Free Report) accounts for about 2.29% of the fund's total assets, followed by Meta Platforms Inc. (class A) (META - Free Report) and Servicenow, Inc. (NOW - Free Report) .
FTGS's top 10 holdings account for about 21.79% of its total assets under management.
Performance and Risk
So far this year, FTGS has added roughly 13.90%, and it's up approximately 29.62% in the last one year (as of 08/22/2024). During this past 52-week period, the fund has traded between $22.83 and $31.79.
FTGS has a beta of 1.12 and standard deviation of 16.22% 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 $136.40 billion in assets, Invesco QQQ has $289.91 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?
A smart beta exchange traded fund, the First Trust Growth Strength ETF (FTGS - Free Report) debuted on 10/25/2022, and offers broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $609.81 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. FTGS is managed by First Trust Advisors. This particular fund 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.60%.
FTGS's 12-month trailing dividend yield is 0.35%.
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.
For FTGS, it has heaviest allocation in the Information Technology sector --about 31.50% of the portfolio --while Financials and Industrials round out the top three.
Taking into account individual holdings, W.r. Berkley Corporation (WRB - Free Report) accounts for about 2.29% of the fund's total assets, followed by Meta Platforms Inc. (class A) (META - Free Report) and Servicenow, Inc. (NOW - Free Report) .
FTGS's top 10 holdings account for about 21.79% of its total assets under management.
Performance and Risk
So far this year, FTGS has added roughly 13.90%, and it's up approximately 29.62% in the last one year (as of 08/22/2024). During this past 52-week period, the fund has traded between $22.83 and $31.79.
FTGS has a beta of 1.12 and standard deviation of 16.22% 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 $136.40 billion in assets, Invesco QQQ has $289.91 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.