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Should You Invest in the First Trust NASDAQ Transportation ETF (FTXR)?
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The First Trust NASDAQ Transportation ETF (FTXR - Free Report) was launched on 09/20/2016, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Transportation/Shipping segment of the 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.
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 9, placing it in bottom 44%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $641.01 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.
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 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.57%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 62.50% of the portfolio, followed by Consumer Discretionary.
Looking at individual holdings, General Motors Company (GM - Free Report) accounts for about 8.87% of total assets, followed by Expeditors International Of Washington, Inc. (EXPD - Free Report) and C.h. Robinson Worldwide, Inc. (CHRW - Free Report) .
The top 10 holdings account for about 59.53% of total assets under management.
Performance and Risk
The ETF has lost about -3.43% and is down about -1.72% so far this year and in the past one year (as of 11/03/2020), respectively. FTXR has traded between $12.80 and $25.34 during this last 52-week period.
The ETF has a beta of 1.43 and standard deviation of 29.71% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Transportation ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FTXR is a reasonable option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares Transportation Average ETF (IYT - Free Report) tracks Dow Jones Transportation Average Index and the U.S. Global Jets ETF (JETS - Free Report) tracks U.S. Global Jets Index. IShares Transportation Average ETF has $1.17 billion in assets, U.S. Global Jets ETF has $1.78 billion. IYT has an expense ratio of 0.42% and JETS charges 0.60%.
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 NASDAQ Transportation ETF (FTXR)?
The First Trust NASDAQ Transportation ETF (FTXR - Free Report) was launched on 09/20/2016, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Transportation/Shipping segment of the 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.
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 9, placing it in bottom 44%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $641.01 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.
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 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.57%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 62.50% of the portfolio, followed by Consumer Discretionary.
Looking at individual holdings, General Motors Company (GM - Free Report) accounts for about 8.87% of total assets, followed by Expeditors International Of Washington, Inc. (EXPD - Free Report) and C.h. Robinson Worldwide, Inc. (CHRW - Free Report) .
The top 10 holdings account for about 59.53% of total assets under management.
Performance and Risk
The ETF has lost about -3.43% and is down about -1.72% so far this year and in the past one year (as of 11/03/2020), respectively. FTXR has traded between $12.80 and $25.34 during this last 52-week period.
The ETF has a beta of 1.43 and standard deviation of 29.71% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Transportation ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FTXR is a reasonable option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares Transportation Average ETF (IYT - Free Report) tracks Dow Jones Transportation Average Index and the U.S. Global Jets ETF (JETS - Free Report) tracks U.S. Global Jets Index. IShares Transportation Average ETF has $1.17 billion in assets, U.S. Global Jets ETF has $1.78 billion. IYT has an expense ratio of 0.42% and JETS charges 0.60%.
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.