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Is First Trust Capital Strength ETF (FTCS) a Strong ETF Right Now?
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Launched on 07/06/2006, the First Trust Capital Strength ETF (FTCS - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FTCS has been able to amass assets over $8.66 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the The Capital Strength Index before fees and expenses.
The Capital Strength Index is an equal-dollar weighted index which provides exposure to well-capitalized companies with strong market positions based on strong balance sheets, high degree of liquidity, ability to generate earnings growth & record financial strength & profit growth.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.16%.
Sector Exposure and Top Holdings
ETFs offer 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.
FTCS's heaviest allocation is in the Information Technology sector, which is about 25.40% of the portfolio. Its Healthcare and Industrials round out the top three.
Looking at individual holdings, Broadcom Inc, (AVGO - Free Report) accounts for about 2.45% of total assets, followed by Costco Wholesale Corporation (COST - Free Report) and Keysight Technologies, Inc, (KEYS - Free Report) .
FTCS's top 10 holdings account for about 22.3% of its total assets under management.
Performance and Risk
So far this year, FTCS has lost about -8.45%, and is up roughly 13.17% in the last one year (as of 02/17/2022). During this past 52-week period, the fund has traded between $65.71 and $84.75.
FTCS has a beta of 0.92 and standard deviation of 20.36% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Capital Strength ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $326.22 billion in assets, SPDR S&P 500 ETF has $403.94 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
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 Capital Strength ETF (FTCS) a Strong ETF Right Now?
Launched on 07/06/2006, the First Trust Capital Strength ETF (FTCS - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FTCS has been able to amass assets over $8.66 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the The Capital Strength Index before fees and expenses.
The Capital Strength Index is an equal-dollar weighted index which provides exposure to well-capitalized companies with strong market positions based on strong balance sheets, high degree of liquidity, ability to generate earnings growth & record financial strength & profit growth.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.16%.
Sector Exposure and Top Holdings
ETFs offer 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.
FTCS's heaviest allocation is in the Information Technology sector, which is about 25.40% of the portfolio. Its Healthcare and Industrials round out the top three.
Looking at individual holdings, Broadcom Inc, (AVGO - Free Report) accounts for about 2.45% of total assets, followed by Costco Wholesale Corporation (COST - Free Report) and Keysight Technologies, Inc, (KEYS - Free Report) .
FTCS's top 10 holdings account for about 22.3% of its total assets under management.
Performance and Risk
So far this year, FTCS has lost about -8.45%, and is up roughly 13.17% in the last one year (as of 02/17/2022). During this past 52-week period, the fund has traded between $65.71 and $84.75.
FTCS has a beta of 0.92 and standard deviation of 20.36% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Capital Strength ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $326.22 billion in assets, SPDR S&P 500 ETF has $403.94 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
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.