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Is First Trust India NIFTY 50 Equal Weight ETF (NFTY) a Strong ETF Right Now?
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The First Trust India NIFTY 50 Equal Weight ETF (NFTY - Free Report) was launched on 02/14/2012, and is a smart beta exchange traded fund designed to offer broad exposure to the Asia-Pacific (Emerging) ETFs 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
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.
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 $269.22 million, which makes it one of the average sized ETFs in the Asia-Pacific (Emerging) ETFs. Before fees and expenses, this particular fund seeks to match the performance of the NIFTY 50 EQUAL WEIGHT INDEX .
The NIFTY 50 Equal Weight Index is an equally weighted index that tracks the performance of the 50 largest and most liquid Indian securities listed on the National Stock Exchange of India.
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 this ETF are 0.80%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0.22%.
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.
Looking at individual holdings, Oil And Natural Gas Corporation Limited (ONGC.IS) accounts for about 2.46% of total assets, followed by Hdfc Life Insurance Company Limited (HDFCLIFE.IS) and Itc Limited (ITC.IS).
NFTY's top 10 holdings account for about 22.34% of its total assets under management.
Performance and Risk
So far this year, NFTY has added about 15.76%, and is up roughly 30.81% in the last one year (as of 08/26/2024). During this past 52-week period, the fund has traded between $46.65 and $63.11.
The ETF has a beta of 0.81 and standard deviation of 18.59% for the trailing three-year period. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust India NIFTY 50 Equal Weight ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Emerging) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
WisdomTree India Earnings ETF (EPI - Free Report) tracks WisdomTree India Earnings Index and the iShares MSCI India ETF (INDA - Free Report) tracks MSCI India Total Return Index. WisdomTree India Earnings ETF has $4.04 billion in assets, iShares MSCI India ETF has $11.38 billion. EPI has an expense ratio of 0.87% and INDA charges 0.65%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Emerging) 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 India NIFTY 50 Equal Weight ETF (NFTY) a Strong ETF Right Now?
The First Trust India NIFTY 50 Equal Weight ETF (NFTY - Free Report) was launched on 02/14/2012, and is a smart beta exchange traded fund designed to offer broad exposure to the Asia-Pacific (Emerging) ETFs 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
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.
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 $269.22 million, which makes it one of the average sized ETFs in the Asia-Pacific (Emerging) ETFs. Before fees and expenses, this particular fund seeks to match the performance of the NIFTY 50 EQUAL WEIGHT INDEX .
The NIFTY 50 Equal Weight Index is an equally weighted index that tracks the performance of the 50 largest and most liquid Indian securities listed on the National Stock Exchange of India.
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 this ETF are 0.80%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0.22%.
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.
Looking at individual holdings, Oil And Natural Gas Corporation Limited (ONGC.IS) accounts for about 2.46% of total assets, followed by Hdfc Life Insurance Company Limited (HDFCLIFE.IS) and Itc Limited (ITC.IS).
NFTY's top 10 holdings account for about 22.34% of its total assets under management.
Performance and Risk
So far this year, NFTY has added about 15.76%, and is up roughly 30.81% in the last one year (as of 08/26/2024). During this past 52-week period, the fund has traded between $46.65 and $63.11.
The ETF has a beta of 0.81 and standard deviation of 18.59% for the trailing three-year period. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust India NIFTY 50 Equal Weight ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Emerging) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
WisdomTree India Earnings ETF (EPI - Free Report) tracks WisdomTree India Earnings Index and the iShares MSCI India ETF (INDA - Free Report) tracks MSCI India Total Return Index. WisdomTree India Earnings ETF has $4.04 billion in assets, iShares MSCI India ETF has $11.38 billion. EPI has an expense ratio of 0.87% and INDA charges 0.65%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Emerging) 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.