Looking for broad exposure to the Industrials - Transportation/Shipping segment of the equity market? You should consider the First Trust NASDAQ Transportation ETF (
FTXR Quick Quote FTXR - Free Report) , a passively managed exchange traded fund launched on 09/20/2016.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Transportation/Shipping is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.14 billion, 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.
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 0.62%.
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 80% of the portfolio, followed by Consumer Discretionary.
Looking at individual holdings, Expeditors International Of Washington, Inc. (
EXPD Quick Quote EXPD - Free Report) accounts for about 8.48% of total assets, followed by Blink Charging Co. ( BLNK Quick Quote BLNK - Free Report) and Csx Corporation ( CSX Quick Quote CSX - Free Report) .
The top 10 holdings account for about 56.70% of total assets under management.
Performance and Risk
The ETF return is roughly 18.62% and is up about 31.57% so far this year and in the past one year (as of 10/18/2021), respectively. FTXR has traded between $23.32 and $35.12 during this last 52-week period.
The ETF has a beta of 1.39 and standard deviation of 30.37% for the trailing three-year period. With about 30 holdings, it has more concentrated exposure than peers.
First Trust NASDAQ Transportation ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FTXR is a great option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares U.S. Transportation 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 U.S. Transportation ETF has $1.63 billion in assets, U.S. Global Jets ETF has $3.71 billion. IYT has an expense ratio of 0.42% and JETS charges 0.60%. Bottom Line
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Zacks ETF Center.