If you're interested in broad exposure to the Industrials - Transportation/Shipping segment of the equity market, look no further than the First Trust NASDAQ Transportation ETF (
FTXR Quick Quote FTXR - Free Report) , a passively managed exchange traded fund launched on 09/20/2016.
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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Transportation/Shipping is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
The fund is sponsored by First Trust Advisors. It has amassed assets over $623.42 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Transportation/Shipping segment of the equity market. FTXR seeks to match the performance of the Nasdaq US Smart Transportation Index before fees and expenses.
The Nasdaq US Smart Transportation Index is a modified factor weighted index, designed to provide exposure to US companies within the transportation industry.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.23%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 58.60% of the portfolio, followed by Consumer Discretionary.
Looking at individual holdings, Tesla, Inc. (
TSLA Quick Quote TSLA - Free Report) accounts for about 16.91% of total assets, followed by C.h. Robinson Worldwide, Inc. ( CHRW Quick Quote CHRW - Free Report) and Old Dominion Freight Line, Inc. ( ODFL Quick Quote ODFL - Free Report) .
The top 10 holdings account for about 64.02% of total assets under management.
Performance and Risk
So far this year, FTXR has lost about -0.21%, and was up about 4.09% in the last one year (as of 09/18/2020). During this past 52-week period, the fund has traded between $12.80 and $25.34.
The ETF has a beta of 1.45 and standard deviation of 29.35% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
First Trust NASDAQ Transportation ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FTXR, then, is not the best option for investors seeking exposure to the Industrials ETFs segment of the market. However, there are better ETFs in the space to consider.
IShares Transportation Average ETF (
IYT Quick Quote IYT - Free Report) tracks Dow Jones Transportation Average Index and the U.S. Global Jets ETF ( JETS Quick Quote JETS - Free Report) tracks U.S. Global Jets Index. IShares Transportation Average ETF has $1.04 billion in assets, U.S. Global Jets ETF has $1.75 billion. IYT has an expense ratio of 0.42% and JETS charges 0.60%. Bottom Line
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Zacks ETF Center.