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Is First Trust NASDAQ Semiconductor ETF (FTXL) a Strong ETF Right Now?
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Making its debut on 09/20/2016, smart beta exchange traded fund First Trust NASDAQ Semiconductor ETF (FTXL - Free Report) provides investors broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
FTXL is managed by First Trust Advisors, and this fund has amassed over $1.50 billion, which makes it one of the larger ETFs in the Technology ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Nasdaq US Smart Semiconductor Index.
The Nasdaq US Smart Semiconductor Index is a modified factor weighted index, designed to provide exposure to US companies within the semiconductor industry.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.60% for FTXL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.52%.
Sector Exposure and Top Holdings
ETFs offer 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.
For FTXL, it has heaviest allocation in the Information Technology sector --about 100% of the portfolio.
When you look at individual holdings, Intel Corporation (INTC - Free Report) accounts for about 9.40% of the fund's total assets, followed by Qualcomm Incorporated (QCOM - Free Report) and Broadcom Inc. (AVGO - Free Report) .
Its top 10 holdings account for approximately 63.17% of FTXL's total assets under management.
Performance and Risk
The ETF has gained about 16.52% and is up roughly 57.44% so far this year and in the past one year (as of 03/08/2024), respectively. FTXL has traded between $58.40 and $95 during this last 52-week period.
FTXL has a beta of 1.31 and standard deviation of 33.29% for the trailing three-year period. With about 33 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Semiconductor ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $4.48 billion in assets, VanEck Semiconductor ETF has $18.06 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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 Semiconductor ETF (FTXL) a Strong ETF Right Now?
Making its debut on 09/20/2016, smart beta exchange traded fund First Trust NASDAQ Semiconductor ETF (FTXL - Free Report) provides investors broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
FTXL is managed by First Trust Advisors, and this fund has amassed over $1.50 billion, which makes it one of the larger ETFs in the Technology ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Nasdaq US Smart Semiconductor Index.
The Nasdaq US Smart Semiconductor Index is a modified factor weighted index, designed to provide exposure to US companies within the semiconductor industry.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.60% for FTXL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.52%.
Sector Exposure and Top Holdings
ETFs offer 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.
For FTXL, it has heaviest allocation in the Information Technology sector --about 100% of the portfolio.
When you look at individual holdings, Intel Corporation (INTC - Free Report) accounts for about 9.40% of the fund's total assets, followed by Qualcomm Incorporated (QCOM - Free Report) and Broadcom Inc. (AVGO - Free Report) .
Its top 10 holdings account for approximately 63.17% of FTXL's total assets under management.
Performance and Risk
The ETF has gained about 16.52% and is up roughly 57.44% so far this year and in the past one year (as of 03/08/2024), respectively. FTXL has traded between $58.40 and $95 during this last 52-week period.
FTXL has a beta of 1.31 and standard deviation of 33.29% for the trailing three-year period. With about 33 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Semiconductor ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Semiconductor ETF (SOXX - Free Report) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH - Free Report) tracks MVIS US Listed Semiconductor 25 Index. IShares Semiconductor ETF has $4.48 billion in assets, VanEck Semiconductor ETF has $18.06 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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.