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Should You Invest in the First Trust Indxx NextG ETF (NXTG)?
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Designed to provide broad exposure to the Technology - Telecom segment of the equity market, the First Trust Indxx NextG ETF (NXTG - Free Report) is a passively managed exchange traded fund launched on 02/17/2011.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 5, placing it in top 31%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $400.90 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.70%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.06%.
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, Arista Networks, Inc. (ANET - Free Report) accounts for about 1.72% of total assets, followed by Xiaomi Corporation (class B) (1810.HK) and Intel Corporation (INTC - Free Report) .
The top 10 holdings account for about 15.97% of total assets under management.
Performance and Risk
So far this year, NXTG has added about 4.54%, and is up about 24.37% in the last one year (as of 03/13/2024). During this past 52-week period, the fund has traded between $64.60 and $80.75.
The ETF has a beta of 0.88 and standard deviation of 17.40% for the trailing three-year period. With about 101 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 good 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)?
Designed to provide broad exposure to the Technology - Telecom segment of the equity market, the First Trust Indxx NextG ETF (NXTG - Free Report) is a passively managed exchange traded fund launched on 02/17/2011.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 5, placing it in top 31%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $400.90 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.70%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.06%.
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, Arista Networks, Inc. (ANET - Free Report) accounts for about 1.72% of total assets, followed by Xiaomi Corporation (class B) (1810.HK) and Intel Corporation (INTC - Free Report) .
The top 10 holdings account for about 15.97% of total assets under management.
Performance and Risk
So far this year, NXTG has added about 4.54%, and is up about 24.37% in the last one year (as of 03/13/2024). During this past 52-week period, the fund has traded between $64.60 and $80.75.
The ETF has a beta of 0.88 and standard deviation of 17.40% for the trailing three-year period. With about 101 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 good 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.