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Should You Invest in the First Trust Indxx NextG ETF (NXTG)?
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Designed to provide broad exposure to the Technology - Telecom segment of the equity market, the First Trust Indxx NextG ETF (NXTG - Free Report) is a passively managed exchange traded fund launched on 02/17/2011.
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. Technology - Telecom is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $887.69 million, making it one of the larger ETFs attempting to match the performance of the Technology - Telecom segment of the equity market. NXTG seeks to match the performance of the INDXX 5G & NEXTG THEMATIC INDEX before fees and expenses.
The Indxx 5G & NextG Thematic Index tracks the performance of companies engaged in the smartphone segment of the telecom and technology sectors.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.70%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 2.32%.
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.
Looking at individual holdings, Advanced Micro Devices, Inc. (AMD - Free Report) accounts for about 2.33% of total assets, followed by Amdocs Limited (DOX - Free Report) and Hewlett Packard Enterprise Company (HPE - Free Report) .
The top 10 holdings account for about 14.87% of total assets under management.
Performance and Risk
So far this year, NXTG has lost about -13.17%, and is down about -1.72% in the last one year (as of 04/19/2022). During this past 52-week period, the fund has traded between $70.42 and $83.17.
The ETF has a beta of 0.82 and standard deviation of 22.60% for the trailing three-year period. With about 99 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Indxx NextG 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, NXTG is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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Should You Invest in the First Trust Indxx NextG ETF (NXTG)?
Designed to provide broad exposure to the Technology - Telecom segment of the equity market, the First Trust Indxx NextG ETF (NXTG - Free Report) is a passively managed exchange traded fund launched on 02/17/2011.
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. Technology - Telecom is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $887.69 million, making it one of the larger ETFs attempting to match the performance of the Technology - Telecom segment of the equity market. NXTG seeks to match the performance of the INDXX 5G & NEXTG THEMATIC INDEX before fees and expenses.
The Indxx 5G & NextG Thematic Index tracks the performance of companies engaged in the smartphone segment of the telecom and technology sectors.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.70%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 2.32%.
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.
Looking at individual holdings, Advanced Micro Devices, Inc. (AMD - Free Report) accounts for about 2.33% of total assets, followed by Amdocs Limited (DOX - Free Report) and Hewlett Packard Enterprise Company (HPE - Free Report) .
The top 10 holdings account for about 14.87% of total assets under management.
Performance and Risk
So far this year, NXTG has lost about -13.17%, and is down about -1.72% in the last one year (as of 04/19/2022). During this past 52-week period, the fund has traded between $70.42 and $83.17.
The ETF has a beta of 0.82 and standard deviation of 22.60% for the trailing three-year period. With about 99 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Indxx NextG 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, NXTG is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.