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Should You Invest in the First Trust NYSE Arca Biotechnology ETF (FBT)?
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Designed to provide broad exposure to the Healthcare - Biotech segment of the equity market, the First Trust NYSE Arca Biotechnology ETF (FBT - Free Report) is a passively managed exchange traded fund launched on 06/19/2006.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 3, placing it in top 19%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.19 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
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.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Beigene, Ltd. (adr) (BGNE - Free Report) accounts for about 3.96% of total assets, followed by Exact Sciences Corporation (EXAS - Free Report) and Catalyst Pharmaceuticals, Inc. (CPRX - Free Report) .
The top 10 holdings account for about 37.39% of total assets under management.
Performance and Risk
The ETF return is roughly 8.51% and is up about 18.99% so far this year and in the past one year (as of 10/07/2024), respectively. FBT has traded between $132.50 and $172.91 during this last 52-week period.
The ETF has a beta of 0.67 and standard deviation of 21.70% 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 holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FBT is an outstanding option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $7.20 billion in assets, iShares Biotechnology ETF has $7.48 billion. XBI has an expense ratio of 0.35% and IBB charges 0.45%.
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)?
Designed to provide broad exposure to the Healthcare - Biotech segment of the equity market, the First Trust NYSE Arca Biotechnology ETF (FBT - Free Report) is a passively managed exchange traded fund launched on 06/19/2006.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 3, placing it in top 19%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.19 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
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.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Beigene, Ltd. (adr) (BGNE - Free Report) accounts for about 3.96% of total assets, followed by Exact Sciences Corporation (EXAS - Free Report) and Catalyst Pharmaceuticals, Inc. (CPRX - Free Report) .
The top 10 holdings account for about 37.39% of total assets under management.
Performance and Risk
The ETF return is roughly 8.51% and is up about 18.99% so far this year and in the past one year (as of 10/07/2024), respectively. FBT has traded between $132.50 and $172.91 during this last 52-week period.
The ETF has a beta of 0.67 and standard deviation of 21.70% 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 holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FBT is an outstanding option for investors seeking exposure to the Health Care ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $7.20 billion in assets, iShares Biotechnology ETF has $7.48 billion. XBI has an expense ratio of 0.35% and IBB charges 0.45%.
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.