Yahoo Finance Should You Invest in the First Trust NASDAQ Semiconductor ETF (FTXL)?
If you're interested in broad exposure to the Technology - Semiconductors segment of the equity market, look no further than the First Trust NASDAQ Semiconductor ETF (FTXL), a passively managed exchange traded fund launched on 09/20/2016.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Semiconductors is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.59 billion, making it one of the larger ETFs attempting to match the performance of the Technology - Semiconductors segment of the equity market. FTXL seeks to match the performance of the Nasdaq US Smart Semiconductor Index before fees and expenses.
The Nasdaq US Smart Semiconductor Index is a modified factor weighted index, designed to provide exposure to US companies within the semiconductor industry.
Costs
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 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.48%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.
Looking at individual holdings, Nvidia Corporation (NVDA) accounts for about 8.82% of total assets, followed by Qualcomm Incorporated (QCOM) and Intel Corporation (INTC).
The top 10 holdings account for about 60.74% of total assets under management.
Performance and Risk
Year-to-date, the First Trust NASDAQ Semiconductor ETF has gained about 22.25% so far, and was up about 47.77% over the last 12 months (as of 06/26/2024). FTXL has traded between $62.18 and $104.57 in this past 52-week period.
The ETF has a beta of 1.27 and standard deviation of 32.61% for the trailing three-year period. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Semiconductor ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FTXL is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that 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 $15.40 billion in assets, VanEck Semiconductor ETF has $24.61 billion. SOXX has an expense ratio of 0.35% and SMH charges 0.35%.
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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First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports
Intel Corporation (INTC) : Free Stock Analysis Report
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
VanEck Semiconductor ETF (SMH): ETF Research Reports
iShares Semiconductor ETF (SOXX): ETF Research Reports
