Designed to provide broad exposure to the Technology ETFs category of the market, the First Trust NASDAQ Semiconductor ETF (FTXL Quick QuoteFTXL - Free Report) is a smart beta exchange traded fund launched on 09/20/2016.

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.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

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.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

Managed by First Trust Advisors, FTXL has amassed assets over $1.54 billion, making it one of the larger ETFs in the Technology ETFs. Before fees and expenses, this particular fund 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

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.

It's 12-month trailing dividend yield comes in at 0.23%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

FTXL's heaviest allocation is in the Information Technology sector, which is about 100% of the portfolio.

When you look at individual holdings, Micron Technology, Inc. (MU) accounts for about 17.08% of the fund's total assets, followed by Intel Corporation (INTC) and Broadcom Inc. (AVGO).

The top 10 holdings account for about 67.11% of total assets under management.

Performance and Risk

The ETF has added about 17.52% so far this year and is up about 101% in the last one year (as of 04/02/2026). In the past 52-week period, it has traded between $62.37 and $162.95

The fund has a beta of 1.43 and standard deviation of 34.74% for the trailing three-year period. With about 32 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) tracks PHLX SOX Semiconductor Sector Index and the VanEck Semiconductor ETF (SMH) tracks MVIS US Listed Semiconductor 25 Index. iShares Semiconductor ETF has $21.34 billion in assets, VanEck Semiconductor ETF has $41.86 billion. SOXX has an expense ratio of 0.34% and SMH changes 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.