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Should You Invest in the First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF (GRID)?
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If you're interested in broad exposure to the Utilities - Infrastructure segment of the equity market, look no further than the First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF (GRID - Free Report) , a passively managed exchange traded fund launched on 11/16/2009.
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. Utilities - Infrastructure is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $898.29 million, making it one of the larger ETFs attempting to match the performance of the Utilities - Infrastructure segment of the equity market. GRID seeks to match the performance of the NASDAQ OMX Clean Edge Smart Grid Infrastructure Index before fees and expenses.
The NASDAQ OMX Clean Edge Smart Grid Infrastructure Index includes companies that are primarily engaged and involved in electric grid, electric meters and devices, networks, energy storage and management, and enabling software used by the smart grid infrastructure sector.
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 0.57%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.17%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Schneider Electric Se (SU.FP) accounts for about 8.98% of total assets, followed by Abb Ltd (ABBN.SW) and National Grid Plc (NG/.LN).
The top 10 holdings account for about 56.75% of total assets under management.
Performance and Risk
The ETF has added about 5.25% and is up about 15.51% so far this year and in the past one year (as of 03/05/2024), respectively. GRID has traded between $85.32 and $110.21 during this last 52-week period.
The ETF has a beta of 1.26 and standard deviation of 20.93% for the trailing three-year period, making it a high risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ Clean Edge Smart Grid Infrastructure 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, GRID is a sufficient option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares Global Infrastructure ETF (IGF - Free Report) tracks S&P Global Infrastructure Index and the Global X U.S. Infrastructure Development ETF (PAVE - Free Report) tracks INDXX U.S. Infrastructure Development Index. IShares Global Infrastructure ETF has $3.50 billion in assets, Global X U.S. Infrastructure Development ETF has $6.54 billion. IGF has an expense ratio of 0.41% and PAVE charges 0.47%.
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 Clean Edge Smart Grid Infrastructure ETF (GRID)?
If you're interested in broad exposure to the Utilities - Infrastructure segment of the equity market, look no further than the First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF (GRID - Free Report) , a passively managed exchange traded fund launched on 11/16/2009.
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. Utilities - Infrastructure is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $898.29 million, making it one of the larger ETFs attempting to match the performance of the Utilities - Infrastructure segment of the equity market. GRID seeks to match the performance of the NASDAQ OMX Clean Edge Smart Grid Infrastructure Index before fees and expenses.
The NASDAQ OMX Clean Edge Smart Grid Infrastructure Index includes companies that are primarily engaged and involved in electric grid, electric meters and devices, networks, energy storage and management, and enabling software used by the smart grid infrastructure sector.
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 0.57%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.17%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Schneider Electric Se (SU.FP) accounts for about 8.98% of total assets, followed by Abb Ltd (ABBN.SW) and National Grid Plc (NG/.LN).
The top 10 holdings account for about 56.75% of total assets under management.
Performance and Risk
The ETF has added about 5.25% and is up about 15.51% so far this year and in the past one year (as of 03/05/2024), respectively. GRID has traded between $85.32 and $110.21 during this last 52-week period.
The ETF has a beta of 1.26 and standard deviation of 20.93% for the trailing three-year period, making it a high risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ Clean Edge Smart Grid Infrastructure 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, GRID is a sufficient option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares Global Infrastructure ETF (IGF - Free Report) tracks S&P Global Infrastructure Index and the Global X U.S. Infrastructure Development ETF (PAVE - Free Report) tracks INDXX U.S. Infrastructure Development Index. IShares Global Infrastructure ETF has $3.50 billion in assets, Global X U.S. Infrastructure Development ETF has $6.54 billion. IGF has an expense ratio of 0.41% and PAVE charges 0.47%.
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.