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Is First Trust Growth Strength ETF (FTGS) a Strong ETF Right Now?
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Launched on 10/25/2022, the First Trust Growth Strength ETF (FTGS - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Growth 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
The fund is sponsored by First Trust Advisors. It has amassed assets over $772.63 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, FTGS seeks to match the performance of the THE GROWTH STRENGTH INDEX .
The Growth Strength Index provides exposure to a mix of domestic equities with filters for liquidity, return on equity, long-term debt, revenue and cash flow growth.
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.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.33%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For FTGS, it has heaviest allocation in the Information Technology sector --about 29.80% of the portfolio --while Financials and Industrials round out the top three.
Taking into account individual holdings, Renaissancere Holdings Ltd. (RNR - Free Report) accounts for about 2.38% of the fund's total assets, followed by Meta Platforms Inc. (class A) (META - Free Report) and Servicenow, Inc. (NOW - Free Report) .
The top 10 holdings account for about 22.52% of total assets under management.
Performance and Risk
The ETF has gained about 16.44% so far this year and is up roughly 36.11% in the last one year (as of 10/23/2024). In the past 52-week period, it has traded between $22.83 and $32.16.
The fund has a beta of 1.11 and standard deviation of 16.05% for the trailing three-year period. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Growth Strength ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $143.97 billion in assets, Invesco QQQ has $301.03 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
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 Growth Strength ETF (FTGS) a Strong ETF Right Now?
Launched on 10/25/2022, the First Trust Growth Strength ETF (FTGS - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Growth 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
The fund is sponsored by First Trust Advisors. It has amassed assets over $772.63 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, FTGS seeks to match the performance of the THE GROWTH STRENGTH INDEX .
The Growth Strength Index provides exposure to a mix of domestic equities with filters for liquidity, return on equity, long-term debt, revenue and cash flow growth.
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.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.33%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For FTGS, it has heaviest allocation in the Information Technology sector --about 29.80% of the portfolio --while Financials and Industrials round out the top three.
Taking into account individual holdings, Renaissancere Holdings Ltd. (RNR - Free Report) accounts for about 2.38% of the fund's total assets, followed by Meta Platforms Inc. (class A) (META - Free Report) and Servicenow, Inc. (NOW - Free Report) .
The top 10 holdings account for about 22.52% of total assets under management.
Performance and Risk
The ETF has gained about 16.44% so far this year and is up roughly 36.11% in the last one year (as of 10/23/2024). In the past 52-week period, it has traded between $22.83 and $32.16.
The fund has a beta of 1.11 and standard deviation of 16.05% for the trailing three-year period. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Growth Strength ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $143.97 billion in assets, Invesco QQQ has $301.03 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
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.