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Is First Trust NASDAQ Food & Beverage ETF (FTXG) a Strong ETF Right Now?
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The First Trust NASDAQ Food & Beverage ETF (FTXG - Free Report) made its debut on 09/20/2016, and is a smart beta exchange traded fund that provides broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
FTXG is managed by First Trust Advisors, and this fund has amassed over $1.01 billion, which makes it one of the average sized ETFs in the Consumer Staples ETFs. FTXG seeks to match the performance of the Nasdaq US Smart Food & Beverage Index before fees and expenses.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.60%.
FTXG's 12-month trailing dividend yield is 1.58%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Consumer Staples sector - about 96.50% of the portfolio.
Taking into account individual holdings, General Mills, Inc. (GIS - Free Report) accounts for about 8.36% of the fund's total assets, followed by Mondelez International, Inc. (MDLZ - Free Report) and Pepsico, Inc. (PEP - Free Report) .
FTXG's top 10 holdings account for about 60.5% of its total assets under management.
Performance and Risk
The ETF has lost about -2.29% and was up about 3.67% so far this year and in the past one year (as of 07/17/2023), respectively. FTXG has traded between $24.84 and $28.24 during this last 52-week period.
FTXG has a beta of 0.59 and standard deviation of 16% 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 $2.65 million in assets, Invesco Dynamic Food & Beverage ETF has $288 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?
The First Trust NASDAQ Food & Beverage ETF (FTXG - Free Report) made its debut on 09/20/2016, and is a smart beta exchange traded fund that provides broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
FTXG is managed by First Trust Advisors, and this fund has amassed over $1.01 billion, which makes it one of the average sized ETFs in the Consumer Staples ETFs. FTXG seeks to match the performance of the Nasdaq US Smart Food & Beverage Index before fees and expenses.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.60%.
FTXG's 12-month trailing dividend yield is 1.58%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Consumer Staples sector - about 96.50% of the portfolio.
Taking into account individual holdings, General Mills, Inc. (GIS - Free Report) accounts for about 8.36% of the fund's total assets, followed by Mondelez International, Inc. (MDLZ - Free Report) and Pepsico, Inc. (PEP - Free Report) .
FTXG's top 10 holdings account for about 60.5% of its total assets under management.
Performance and Risk
The ETF has lost about -2.29% and was up about 3.67% so far this year and in the past one year (as of 07/17/2023), respectively. FTXG has traded between $24.84 and $28.24 during this last 52-week period.
FTXG has a beta of 0.59 and standard deviation of 16% 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 $2.65 million in assets, Invesco Dynamic Food & Beverage ETF has $288 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.