News

The First Trust NASDAQ Bank ETF (FTXO) was launched on 09/20/2016, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Banking segment of the equity market.

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.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Banking is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.

Index Details

The fund is sponsored by First Trust Advisors. It has amassed assets over $202.37 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Banking segment of the equity market. FTXO seeks to match the performance of the Nasdaq US Smart Banks Index before fees and expenses.

The Nasdaq US Smart Banks Index is a modified factor weighted index, designed to provide exposure to US companies within the banking industry.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts 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 has a 12-month trailing dividend yield of 2.18%.

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.

This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.

Looking at individual holdings, Wells Fargo & Company (WFC) accounts for about 8.83% of total assets, followed by Citigroup Inc. (C) and Bank Of America Corporation (BAC).

The top 10 holdings account for about 59.38% of total assets under management.

Performance and Risk

Year-to-date, the First Trust NASDAQ Bank ETF has gained about 0.38% so far, and is up about 32.11% over the last 12 months (as of 01/14/2025). FTXO has traded between $23.99 and $35.28 in this past 52-week period.

The ETF has a beta of 1.11 and standard deviation of 27.84% for the trailing three-year period. With about 51 holdings, it effectively diversifies company-specific risk.

Alternatives

First Trust NASDAQ Bank ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FTXO is a sufficient option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

SPDR S&P Bank ETF (KBE) tracks S&P Banks Select Industry Index and the Invesco KBW Bank ETF (KBWB) tracks KBW Nasdaq Bank index. SPDR S&P Bank ETF has $2.27 billion in assets, Invesco KBW Bank ETF has $2.83 billion. KBE has an expense ratio of 0.35% and KBWB 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 Bank ETF (FTXO): ETF Research Reports

Bank of America Corporation (BAC) : Free Stock Analysis Report

Wells Fargo & Company (WFC) : Free Stock Analysis Report

Citigroup Inc. (C) : Free Stock Analysis Report

SPDR S&P Bank ETF (KBE): ETF Research Reports

Invesco KBW Bank ETF (KBWB): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.