Is First Trust NASDAQ Bank ETF (FTXO) a Strong ETF Right Now?

The First Trust NASDAQ Bank ETF (FTXO) was launched on 09/20/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Financials ETFs category of the market.What Are Smart Beta ETFs?For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.Fund Sponsor & IndexThe fund is sponsored by First Trust Advisors. It has amassed assets over $245.77 million, making it one of the average sized ETFs in the Financials ETFs. This particular fund 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.Cost & Other ExpensesSince cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.Operating expenses on an annual basis are 0.60% for this ETF, which makes it on par with most peer products in the space.It's 12-month trailing dividend yield comes in at 1.95%.Sector Exposure and Top HoldingsWhile 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.For FTXO, it has heaviest allocation in the Financials sector --about 100% of the portfolio.Looking at individual holdings, Citigroup Inc. (C) accounts for about 8.98% of total assets, followed by Jpmorgan Chase & Co. (JPM) and Bank Of America Corporation (BAC).The top 10 holdings account for about 59.67% of total assets under management.Performance and RiskThe ETF return is roughly 12% so far this year and was up about 24.09% in the last one year (as of 10/08/2025). In the past 52-week period, it has traded between $25.92 and $36.57FTXO has a beta of 0.97 and standard deviation of 26.88% for the trailing three-year period. With about 51 holdings, it effectively diversifies company-specific risk .AlternativesFirst Trust NASDAQ Bank ETF is an excellent option for investors seeking to outperform the Financials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.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 $1.53 billion in assets, Invesco KBW Bank ETF has $5.57 billion. KBE has an expense ratio of 0.35% and KBWB 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 Financials ETFsBottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Trust NASDAQ Bank ETF (FTXO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks