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Should You Invest in the First Trust NASDAQ Bank ETF (FTXO)?
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Looking for broad exposure to the Financials - Banking segment of the equity market? You should consider the First Trust NASDAQ Bank ETF (FTXO - Free Report) , a passively managed exchange traded fund launched on 09/20/2016.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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. Financials - Banking is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $227.69 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Banking segment of the equity market. FTXO seeks to match the performance of the Nasdaq US Smart Banks Index before fees and expenses.
The Nasdaq US Smart Banks Index is a modified factor weighted index, designed to provide exposure to US companies within the banking industry.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.74%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Jpmorgan Chase & Co. (JPM - Free Report) accounts for about 8.52% of total assets, followed by Wells Fargo & Company (WFC - Free Report) and New York Community Bancorp, Inc. (NYCB - Free Report) .
The top 10 holdings account for about 57.38% of total assets under management.
Performance and Risk
So far this year, FTXO has added about 7.29%, and is down about -14.81% in the last one year (as of 01/26/2023). During this past 52-week period, the fund has traded between $25.42 and $36.10.
The ETF has a beta of 1.15 and standard deviation of 40.96% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Bank 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, FTXO is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
SPDR S&P Bank ETF (KBE - Free Report) tracks S&P Banks Select Industry Index and the Invesco KBW Bank ETF (KBWB - Free Report) tracks KBW Nasdaq Bank index. SPDR S&P Bank ETF has $1.71 billion in assets, Invesco KBW Bank ETF has $1.81 billion. KBE has an expense ratio of 0.35% and KBWB charges 0.35%.
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 Bank ETF (FTXO)?
Looking for broad exposure to the Financials - Banking segment of the equity market? You should consider the First Trust NASDAQ Bank ETF (FTXO - Free Report) , a passively managed exchange traded fund launched on 09/20/2016.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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. Financials - Banking is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $227.69 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Banking segment of the equity market. FTXO seeks to match the performance of the Nasdaq US Smart Banks Index before fees and expenses.
The Nasdaq US Smart Banks Index is a modified factor weighted index, designed to provide exposure to US companies within the banking industry.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.74%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Jpmorgan Chase & Co. (JPM - Free Report) accounts for about 8.52% of total assets, followed by Wells Fargo & Company (WFC - Free Report) and New York Community Bancorp, Inc. (NYCB - Free Report) .
The top 10 holdings account for about 57.38% of total assets under management.
Performance and Risk
So far this year, FTXO has added about 7.29%, and is down about -14.81% in the last one year (as of 01/26/2023). During this past 52-week period, the fund has traded between $25.42 and $36.10.
The ETF has a beta of 1.15 and standard deviation of 40.96% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Bank 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, FTXO is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
SPDR S&P Bank ETF (KBE - Free Report) tracks S&P Banks Select Industry Index and the Invesco KBW Bank ETF (KBWB - Free Report) tracks KBW Nasdaq Bank index. SPDR S&P Bank ETF has $1.71 billion in assets, Invesco KBW Bank ETF has $1.81 billion. KBE has an expense ratio of 0.35% and KBWB charges 0.35%.
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.