Should You Invest in the First Trust Dow Jones Internet ETF (FDN)?

Looking for broad exposure to the Technology - Internet segment of the equity market? You should consider the First Trust Dow Jones Internet ETF (FDN), a passively managed exchange traded fund launched on June 19, 2006.Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Internet is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.Index DetailsThe fund is sponsored by First Trust Advisors. It has amassed assets over $7.88 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Internet segment of the equity market. FDN seeks to match the performance of the Dow Jones Internet Composite Index before fees and expenses.The Dow Jones Internet Composite Index includes only companies whose primary focus is Internet-related.CostsWhen considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.Annual operating expenses for this ETF are 0.49%, making it on par with most peer products in the space.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.This ETF has heaviest allocation in the Telecom sector -- about 34.3% of the portfolio. Information Technology and Consumer Discretionary round out the top three.Looking at individual holdings, Meta Platforms Inc. (class A) (META) accounts for about 10.63% of total assets, followed by Amazon.com, Inc. (AMZN) and Netflix, Inc. (NFLX).The top 10 holdings account for about 63.94% of total assets under management.Performance and RiskYear-to-date, the First Trust Dow Jones Internet ETF return is roughly 17.2% so far, and was up about 46.19% over the last 12 months (as of 09/10/2025). FDN has traded between $198.51 and $284.99 in this past 52-week period.The ETF has a beta of 1.16 and standard deviation of 24.91% for the trailing three-year period, making it a high risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers.AlternativesFirst Trust Dow Jones Internet 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, FDN 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.ALPS (OGIG) tracks OSHARES GLOBAL INTERNET GIANTS INDEX and the Invesco NASDAQ Internet ETF (PNQI) tracks NASDAQ Internet Index. ALPS has $162.17 million in assets, Invesco NASDAQ Internet ETF has $815.91 million. OGIG has an expense ratio of 0.48%, and PNQI charges 0.6%.Bottom 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 Dow Jones Internet ETF (FDN): 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