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Should You Invest in the First Trust Water ETF (FIW)?
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The First Trust Water ETF (FIW - Free Report) was launched on 05/08/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Water segment of the U.S. equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Water is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $323.75 M, making it one of the average sized ETFs attempting to match the performance of the Industrials - Water segment of the U.S. equity market. FIW seeks to match the performance of the ISE Clean Edge Water Index before fees and expenses.
The ISE Clean Edge Water Index is a modified market capitalization-weighted index comprised of exchange-listed companies that derive a substantial portion of their revenues from the potable and wastewater industry.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.56%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.61%.
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 Industrials sector--about 55.90% of the portfolio. Utilities and Healthcare round out the top three.
Looking at individual holdings, Idexx Laboratories, Inc. (IDXX - Free Report) accounts for about 4.45% of total assets, followed by American Water Works Company, Inc. (AWK - Free Report) and Ecolab Inc. (ECL - Free Report) .
The top 10 holdings account for about 38.69% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Water ETF has added roughly 0.27% so far, and was up about 13.22% over the last 12 months (as of 07/13/2018). FIW has traded between $41.93 and $49.96 in this past 52-week period.
The ETF has a beta of 1.10 and standard deviation of 15.41% for the trailing three-year period, making it a medium risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.
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 Water ETF (FIW)?
The First Trust Water ETF (FIW - Free Report) was launched on 05/08/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Water segment of the U.S. equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Water is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $323.75 M, making it one of the average sized ETFs attempting to match the performance of the Industrials - Water segment of the U.S. equity market. FIW seeks to match the performance of the ISE Clean Edge Water Index before fees and expenses.
The ISE Clean Edge Water Index is a modified market capitalization-weighted index comprised of exchange-listed companies that derive a substantial portion of their revenues from the potable and wastewater industry.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.56%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.61%.
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 Industrials sector--about 55.90% of the portfolio. Utilities and Healthcare round out the top three.
Looking at individual holdings, Idexx Laboratories, Inc. (IDXX - Free Report) accounts for about 4.45% of total assets, followed by American Water Works Company, Inc. (AWK - Free Report) and Ecolab Inc. (ECL - Free Report) .
The top 10 holdings account for about 38.69% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Water ETF has added roughly 0.27% so far, and was up about 13.22% over the last 12 months (as of 07/13/2018). FIW has traded between $41.93 and $49.96 in this past 52-week period.
The ETF has a beta of 1.10 and standard deviation of 15.41% for the trailing three-year period, making it a medium risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.
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.