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Is First Trust NASDAQ Food & Beverage ETF (FTXG) a Strong ETF Right Now?
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Launched on 09/20/2016, the First Trust NASDAQ Food & Beverage ETF (FTXG - Free Report) is a smart beta exchange traded fund offering broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by First Trust Advisors, FTXG has amassed assets over $830.41 million, making it one of the average sized ETFs in the Consumer Staples ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Nasdaq US Smart Food & Beverage Index.
The Nasdaq US Smart Food & Beverage Index is a modified factor weighted index, designed to provide exposure to US companies within the food and beverage industry.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.60% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.54%.
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.
FTXG's heaviest allocation is in the Consumer Staples sector, which is about 95.70% of the portfolio.
Taking into account individual holdings, Archer-Daniels-Midland Company (ADM - Free Report) accounts for about 8.95% of the fund's total assets, followed by Bunge Limited (BG - Free Report) and Tyson Foods, Inc. (class A) (TSN - Free Report) .
FTXG's top 10 holdings account for about 57.57% of its total assets under management.
Performance and Risk
The ETF has added roughly 8.58% so far this year and it's up approximately 8.99% in the last one year (as of 05/05/2022). In the past 52-week period, it has traded between $24 and $28.98.
The ETF has a beta of 0.60 and standard deviation of 21% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Food & Beverage ETF is a reasonable option for investors seeking to outperform the Consumer Staples ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
VanEck Future of Food ETF tracks ---------------------------------------- and the Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) tracks Dynamic Food & Beverage Intellidex Index. VanEck Future of Food ETF has $2.12 million in assets, Invesco Dynamic Food & Beverage ETF has $306.46 million. YUMY has an expense ratio of 0.69% and PBJ charges 0.63%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Staples ETFs.
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 NASDAQ Food & Beverage ETF (FTXG) a Strong ETF Right Now?
Launched on 09/20/2016, the First Trust NASDAQ Food & Beverage ETF (FTXG - Free Report) is a smart beta exchange traded fund offering broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by First Trust Advisors, FTXG has amassed assets over $830.41 million, making it one of the average sized ETFs in the Consumer Staples ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Nasdaq US Smart Food & Beverage Index.
The Nasdaq US Smart Food & Beverage Index is a modified factor weighted index, designed to provide exposure to US companies within the food and beverage industry.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.60% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.54%.
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.
FTXG's heaviest allocation is in the Consumer Staples sector, which is about 95.70% of the portfolio.
Taking into account individual holdings, Archer-Daniels-Midland Company (ADM - Free Report) accounts for about 8.95% of the fund's total assets, followed by Bunge Limited (BG - Free Report) and Tyson Foods, Inc. (class A) (TSN - Free Report) .
FTXG's top 10 holdings account for about 57.57% of its total assets under management.
Performance and Risk
The ETF has added roughly 8.58% so far this year and it's up approximately 8.99% in the last one year (as of 05/05/2022). In the past 52-week period, it has traded between $24 and $28.98.
The ETF has a beta of 0.60 and standard deviation of 21% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Food & Beverage ETF is a reasonable option for investors seeking to outperform the Consumer Staples ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
VanEck Future of Food ETF tracks ---------------------------------------- and the Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) tracks Dynamic Food & Beverage Intellidex Index. VanEck Future of Food ETF has $2.12 million in assets, Invesco Dynamic Food & Beverage ETF has $306.46 million. YUMY has an expense ratio of 0.69% and PBJ charges 0.63%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Staples ETFs.
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.