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Should You Invest in the First Trust Dow Jones Internet ETF (FDN)?
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Launched on 06/19/2006, the First Trust Dow Jones Internet ETF (FDN - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Internet segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Internet is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $3.92 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Internet segment of the equity market. FDN seeks to match the performance of the Dow Jones Internet Composite Index before fees and expenses.
The Dow Jones Internet Composite Index includes only companies whose primary focus is Internet-related.
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 0.51%, making it on par with most peer products in the space.
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 Information Technology sector--about 42.20% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Amazon.com, Inc. (AMZN - Free Report) accounts for about 9.11% of total assets, followed by Meta Platforms Inc. (class A) (META - Free Report) and Cisco Systems, Inc. (CSCO - Free Report) .
The top 10 holdings account for about 49.76% of total assets under management.
Performance and Risk
So far this year, FDN has added about 16.08%, and is down about -26.47% in the last one year (as of 03/30/2023). During this past 52-week period, the fund has traded between $116.11 and $195.51.
The ETF has a beta of 1.11 and standard deviation of 32.32% for the trailing three-year period, making it a high risk choice in the space. With about 43 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Dow Jones Internet 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, FDN is a great 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.
Invesco NASDAQ Internet ETF (PNQI - Free Report) tracks NASDAQ Internet Index and the ARK Next Generation Internet ETF (ARKW - Free Report) tracks N/A. Invesco NASDAQ Internet ETF has $517.94 million in assets, ARK Next Generation Internet ETF has $1.24 billion. PNQI has an expense ratio of 0.60% and ARKW charges 0.88%.
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 Dow Jones Internet ETF (FDN)?
Launched on 06/19/2006, the First Trust Dow Jones Internet ETF (FDN - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Internet segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Internet is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $3.92 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Internet segment of the equity market. FDN seeks to match the performance of the Dow Jones Internet Composite Index before fees and expenses.
The Dow Jones Internet Composite Index includes only companies whose primary focus is Internet-related.
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 0.51%, making it on par with most peer products in the space.
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 Information Technology sector--about 42.20% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Amazon.com, Inc. (AMZN - Free Report) accounts for about 9.11% of total assets, followed by Meta Platforms Inc. (class A) (META - Free Report) and Cisco Systems, Inc. (CSCO - Free Report) .
The top 10 holdings account for about 49.76% of total assets under management.
Performance and Risk
So far this year, FDN has added about 16.08%, and is down about -26.47% in the last one year (as of 03/30/2023). During this past 52-week period, the fund has traded between $116.11 and $195.51.
The ETF has a beta of 1.11 and standard deviation of 32.32% for the trailing three-year period, making it a high risk choice in the space. With about 43 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Dow Jones Internet 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, FDN is a great 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.
Invesco NASDAQ Internet ETF (PNQI - Free Report) tracks NASDAQ Internet Index and the ARK Next Generation Internet ETF (ARKW - Free Report) tracks N/A. Invesco NASDAQ Internet ETF has $517.94 million in assets, ARK Next Generation Internet ETF has $1.24 billion. PNQI has an expense ratio of 0.60% and ARKW charges 0.88%.
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.