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Should You Invest in the First Trust Water ETF (FIW)?
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Designed to provide broad exposure to the Industrials - Water segment of the equity market, the First Trust Water ETF (FIW - Free Report) is a passively managed exchange traded fund launched on 05/08/2007.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Water 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 $1.47 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Water segment of the equity market. FIW seeks to match the performance of the ISE Clean Edge Water Index before fees and expenses.
The ISE Clean Edge Water Index is a modified market capitalization-weighted index comprised of exchange-listed companies that derive a substantial portion of their revenues from the potable and wastewater industry.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.53%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.70%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 51.80% of the portfolio. Utilities and Healthcare round out the top three.
Looking at individual holdings, Advanced Drainage Systems, Inc. (WMS - Free Report) accounts for about 4.79% of total assets, followed by Roper Technologies, Inc. (ROP - Free Report) and Ecolab Inc. (ECL - Free Report) .
The top 10 holdings account for about 40.73% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Water ETF has lost about -3.16% so far, and is up roughly 15.14% over the last 12 months (as of 01/05/2024). FIW has traded between $77.30 and $95.37 in this past 52-week period.
The ETF has a beta of 1.04 and standard deviation of 19.52% for the trailing three-year period, making it a medium risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Water 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, FIW is a sufficient option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco S&P Global Water Index ETF (CGW - Free Report) tracks S&P GLOBAL WATER INDEX and the Invesco Water Resources ETF (PHO - Free Report) tracks NASDAQ OMX US Water Index. Invesco S&P Global Water Index ETF has $930.32 million in assets, Invesco Water Resources ETF has $1.89 billion. CGW has an expense ratio of 0.57% and PHO charges 0.60%.
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 Water ETF (FIW)?
Designed to provide broad exposure to the Industrials - Water segment of the equity market, the First Trust Water ETF (FIW - Free Report) is a passively managed exchange traded fund launched on 05/08/2007.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Water 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 $1.47 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Water segment of the equity market. FIW seeks to match the performance of the ISE Clean Edge Water Index before fees and expenses.
The ISE Clean Edge Water Index is a modified market capitalization-weighted index comprised of exchange-listed companies that derive a substantial portion of their revenues from the potable and wastewater industry.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.53%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.70%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 51.80% of the portfolio. Utilities and Healthcare round out the top three.
Looking at individual holdings, Advanced Drainage Systems, Inc. (WMS - Free Report) accounts for about 4.79% of total assets, followed by Roper Technologies, Inc. (ROP - Free Report) and Ecolab Inc. (ECL - Free Report) .
The top 10 holdings account for about 40.73% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Water ETF has lost about -3.16% so far, and is up roughly 15.14% over the last 12 months (as of 01/05/2024). FIW has traded between $77.30 and $95.37 in this past 52-week period.
The ETF has a beta of 1.04 and standard deviation of 19.52% for the trailing three-year period, making it a medium risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Water 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, FIW is a sufficient option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco S&P Global Water Index ETF (CGW - Free Report) tracks S&P GLOBAL WATER INDEX and the Invesco Water Resources ETF (PHO - Free Report) tracks NASDAQ OMX US Water Index. Invesco S&P Global Water Index ETF has $930.32 million in assets, Invesco Water Resources ETF has $1.89 billion. CGW has an expense ratio of 0.57% and PHO charges 0.60%.
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.