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Should You Invest in the First Trust Indxx NextG ETF (NXTG)?
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Launched on 02/17/2011, the First Trust Indxx NextG ETF (NXTG - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Telecom segment of the equity market.
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.
Additionally, sector ETFs offer convenient ways 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 11, placing it in bottom 31%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $418.44 million, making it one of the average sized 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 1.85%.
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.
Looking at individual holdings, Nvidia Corporation (NVDA - Free Report) accounts for about 1.83% of total assets, followed by Renesas Electronics Corporation (6723.JP) and Lenovo Group Limited (992.HK).
The top 10 holdings account for about 16.02% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Indxx NextG ETF has gained about 10.08% so far, and is down about -3.15% over the last 12 months (as of 05/04/2023). NXTG has traded between $54.30 and $72.03 in this past 52-week period.
The ETF has a beta of 0.88 and standard deviation of 18.63% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Indxx NextG ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, NXTG is a reasonable option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.
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Should You Invest in the First Trust Indxx NextG ETF (NXTG)?
Launched on 02/17/2011, the First Trust Indxx NextG ETF (NXTG - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Telecom segment of the equity market.
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.
Additionally, sector ETFs offer convenient ways 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 11, placing it in bottom 31%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $418.44 million, making it one of the average sized 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 1.85%.
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.
Looking at individual holdings, Nvidia Corporation (NVDA - Free Report) accounts for about 1.83% of total assets, followed by Renesas Electronics Corporation (6723.JP) and Lenovo Group Limited (992.HK).
The top 10 holdings account for about 16.02% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Indxx NextG ETF has gained about 10.08% so far, and is down about -3.15% over the last 12 months (as of 05/04/2023). NXTG has traded between $54.30 and $72.03 in this past 52-week period.
The ETF has a beta of 0.88 and standard deviation of 18.63% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Indxx NextG ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, NXTG is a reasonable option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.