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The FTSC VALUE AD (FYT - Free Report) was launched on 04/19/2011, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Value 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by First Trust Advisors, FYT has amassed assets over $229.93 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. FYT seeks to match the performance of the Nasdaq AlphaDEX Small Cap Value Index before fees and expenses.
The NASDAQ AlphaDEX Small Cap Value Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 700 Small Cap Value Index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.70% for FYT, making it one of the most expensive products in the space.
FYT's 12-month trailing dividend yield is 0.97%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Financials sector - about 30.10% of the portfolio. Industrials and Consumer Discretionary round out the top three.
When you look at individual holdings, Encore Wire Corporation (WIRE - Free Report) accounts for about 0.73% of the fund's total assets, followed by Genworth Financial, Inc. (GNW - Free Report) and Tri Pointe Homes, Inc. (TPH - Free Report) .
The top 10 holdings account for about 6.98% of total assets under management.
Performance and Risk
The ETF has gained about 32.97% and is up about 51.44% so far this year and in the past one year (as of 11/15/2021), respectively. FYT has traded between $38.23 and $54.19 during this last 52-week period.
FYT has a beta of 1.51 and standard deviation of 35.43% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 263 holdings, it effectively diversifies company-specific risk.
Alternatives
FTSC VALUE AD is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the VIPERSSC VALUE (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $16.97 billion in assets, VIPERSSC VALUE has $26.91 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small Cap Value.
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 FTSC VALUE AD (FYT) a Strong ETF Right Now?
The FTSC VALUE AD (FYT - Free Report) was launched on 04/19/2011, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Value 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by First Trust Advisors, FYT has amassed assets over $229.93 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. FYT seeks to match the performance of the Nasdaq AlphaDEX Small Cap Value Index before fees and expenses.
The NASDAQ AlphaDEX Small Cap Value Index is an enhanced index which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 700 Small Cap Value Index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.70% for FYT, making it one of the most expensive products in the space.
FYT's 12-month trailing dividend yield is 0.97%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Financials sector - about 30.10% of the portfolio. Industrials and Consumer Discretionary round out the top three.
When you look at individual holdings, Encore Wire Corporation (WIRE - Free Report) accounts for about 0.73% of the fund's total assets, followed by Genworth Financial, Inc. (GNW - Free Report) and Tri Pointe Homes, Inc. (TPH - Free Report) .
The top 10 holdings account for about 6.98% of total assets under management.
Performance and Risk
The ETF has gained about 32.97% and is up about 51.44% so far this year and in the past one year (as of 11/15/2021), respectively. FYT has traded between $38.23 and $54.19 during this last 52-week period.
FYT has a beta of 1.51 and standard deviation of 35.43% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 263 holdings, it effectively diversifies company-specific risk.
Alternatives
FTSC VALUE AD is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the VIPERSSC VALUE (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $16.97 billion in assets, VIPERSSC VALUE has $26.91 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small Cap Value.
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.