Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the First Trust Capital Strength ETF (FTCS - Free Report) , a passively managed exchange traded fund launched on 07/06/2006.
The fund is sponsored by First Trust Advisors. It has amassed assets over $863.09 M, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.64%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.11%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Industrials sector--about 25% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Expeditors International Of Washington, Inc. (EXPD - Free Report) accounts for about 2.31% of total assets, followed by Apple Inc. (AAPL - Free Report) and T. Rowe Price Group, Inc. (TROW - Free Report) .
The top 10 holdings account for about 22.03% of total assets under management.
Performance and Risk
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.
The ETF has gained about 4.07% so far this year and was up about 16.03% in the last one year (as of 06/14/2018). In the past 52-week period, it has traded between $45.42 and $54.95.
The ETF has a beta of 0.94 and standard deviation of 12.26% for the trailing three-year period, making it a medium risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
First Trust Capital Strength ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FTCS is a great option for investors seeking exposure to the Large Cap ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $149.95 B in assets, SPDR S&P 500 ETF has $265.25 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.