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Is First Trust Capital Strength ETF (FTCS) a Strong ETF Right Now?
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The First Trust Capital Strength ETF (FTCS - Free Report) was launched on 07/06/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FTCS has been able to amass assets over $8.46 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. FTCS seeks to match the performance of the The Capital Strength Index before fees and expenses.
The Capital Strength Index is an equal-dollar weighted index which provides exposure to well-capitalized companies with strong market positions based on strong balance sheets, high degree of liquidity, ability to generate earnings growth & record financial strength & profit growth.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for FTCS are 0.54%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.27%.
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.
Representing 23.90% of the portfolio, the fund has heaviest allocation to the Industrials sector; Financials and Consumer Staples round out the top three.
When you look at individual holdings, Microsoft Corporation (MSFT - Free Report) accounts for about 2.28% of the fund's total assets, followed by Te Connectivity Plc (TEL - Free Report) and Abbvie Inc. (ABBV - Free Report) .
The top 10 holdings account for about 21.5% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Capital Strength ETF has gained about 4.11% so far, and is up about 9.78% over the last 12 months (as of 06/09/2025). FTCS has traded between $81.60 and $94.03 in this past 52-week period.
The fund has a beta of 0.81 and standard deviation of 13.37% for the trailing three-year period, which makes FTCS a medium risk choice in this particular space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Capital Strength ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO - Free Report) tracks S&P 500 Index. SPDR S&P 500 ETF has $611.96 billion in assets, Vanguard S&P 500 ETF has $667.21 billion. SPY has an expense ratio of 0.09% and VOO charges 0.03%.
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 Blend.
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 Capital Strength ETF (FTCS) a Strong ETF Right Now?
The First Trust Capital Strength ETF (FTCS - Free Report) was launched on 07/06/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by First Trust Advisors. FTCS has been able to amass assets over $8.46 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. FTCS seeks to match the performance of the The Capital Strength Index before fees and expenses.
The Capital Strength Index is an equal-dollar weighted index which provides exposure to well-capitalized companies with strong market positions based on strong balance sheets, high degree of liquidity, ability to generate earnings growth & record financial strength & profit growth.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for FTCS are 0.54%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.27%.
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.
Representing 23.90% of the portfolio, the fund has heaviest allocation to the Industrials sector; Financials and Consumer Staples round out the top three.
When you look at individual holdings, Microsoft Corporation (MSFT - Free Report) accounts for about 2.28% of the fund's total assets, followed by Te Connectivity Plc (TEL - Free Report) and Abbvie Inc. (ABBV - Free Report) .
The top 10 holdings account for about 21.5% of total assets under management.
Performance and Risk
Year-to-date, the First Trust Capital Strength ETF has gained about 4.11% so far, and is up about 9.78% over the last 12 months (as of 06/09/2025). FTCS has traded between $81.60 and $94.03 in this past 52-week period.
The fund has a beta of 0.81 and standard deviation of 13.37% for the trailing three-year period, which makes FTCS a medium risk choice in this particular space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust Capital Strength ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO - Free Report) tracks S&P 500 Index. SPDR S&P 500 ETF has $611.96 billion in assets, Vanguard S&P 500 ETF has $667.21 billion. SPY has an expense ratio of 0.09% and VOO charges 0.03%.
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 Blend.
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.