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Is First Trust NASDAQ Food & Beverage ETF (FTXG) a Strong ETF Right Now?
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The First Trust NASDAQ Food & Beverage ETF (FTXG - Free Report) was launched on 09/20/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FTXG has been able to amass assets over $957.57 million, making it one of the average sized ETFs in the Consumer Staples ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Nasdaq US Smart Food & Beverage Index.
The Nasdaq US Smart Food & Beverage Index is a modified factor weighted index, designed to provide exposure to US companies within the food and beverage industry.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
FTXG's 12-month trailing dividend yield is 1.50%.
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.
FTXG's heaviest allocation is in the Consumer Staples sector, which is about 96.10% of the portfolio.
When you look at individual holdings, Kellogg Company (K - Free Report) accounts for about 8.14% of the fund's total assets, followed by Molson Coors Beverage Company (TAP - Free Report) and Archer-Daniels-Midland Company (ADM - Free Report) .
Its top 10 holdings account for approximately 58.08% of FTXG's total assets under management.
Performance and Risk
So far this year, FTXG return is roughly 0%, and was up about 4.04% in the last one year (as of 01/11/2023). During this past 52-week period, the fund has traded between $24.82 and $28.98.
FTXG has a beta of 0.62 and standard deviation of 21.96% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Food & Beverage ETF is an excellent option for investors seeking to outperform the Consumer Staples ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
VanEck Future of Food ETF tracks ---------------------------------------- and the Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) tracks Dynamic Food & Beverage Intellidex Index. VanEck Future of Food ETF has $2.79 million in assets, Invesco Dynamic Food & Beverage ETF has $376.67 million. YUMY has an expense ratio of 0.69% and PBJ charges 0.63%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Staples 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 NASDAQ Food & Beverage ETF (FTXG) a Strong ETF Right Now?
The First Trust NASDAQ Food & Beverage ETF (FTXG - Free Report) was launched on 09/20/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FTXG has been able to amass assets over $957.57 million, making it one of the average sized ETFs in the Consumer Staples ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Nasdaq US Smart Food & Beverage Index.
The Nasdaq US Smart Food & Beverage Index is a modified factor weighted index, designed to provide exposure to US companies within the food and beverage industry.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
FTXG's 12-month trailing dividend yield is 1.50%.
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.
FTXG's heaviest allocation is in the Consumer Staples sector, which is about 96.10% of the portfolio.
When you look at individual holdings, Kellogg Company (K - Free Report) accounts for about 8.14% of the fund's total assets, followed by Molson Coors Beverage Company (TAP - Free Report) and Archer-Daniels-Midland Company (ADM - Free Report) .
Its top 10 holdings account for approximately 58.08% of FTXG's total assets under management.
Performance and Risk
So far this year, FTXG return is roughly 0%, and was up about 4.04% in the last one year (as of 01/11/2023). During this past 52-week period, the fund has traded between $24.82 and $28.98.
FTXG has a beta of 0.62 and standard deviation of 21.96% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Food & Beverage ETF is an excellent option for investors seeking to outperform the Consumer Staples ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
VanEck Future of Food ETF tracks ---------------------------------------- and the Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) tracks Dynamic Food & Beverage Intellidex Index. VanEck Future of Food ETF has $2.79 million in assets, Invesco Dynamic Food & Beverage ETF has $376.67 million. YUMY has an expense ratio of 0.69% and PBJ charges 0.63%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Staples 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.