Should You Invest in the First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF (GRID)?

Launched on 11/16/2009, the First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF (GRID) is a passively managed exchange traded fund designed to provide a broad exposure to the Utilities - Infrastructure 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. Utilities - Infrastructure is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.Index DetailsThe fund is sponsored by First Trust Advisors. It has amassed assets over $1.58 billion, making it one of the larger ETFs attempting to match the performance of the Utilities - Infrastructure segment of the equity market. GRID seeks to match the performance of the NASDAQ OMX Clean Edge Smart Grid Infrastructure Index before fees and expenses.The NASDAQ OMX Clean Edge Smart Grid Infrastructure Index includes companies that are primarily engaged and involved in electric grid, electric meters and devices, networks, energy storage and management, and enabling software used by the smart grid infrastructure sector.CostsSince 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.Annual operating expenses for this ETF are 0.57%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 1.07%.Sector Exposure and Top HoldingsIt 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.Looking at individual holdings, National Grid Plc (NG/.LN) accounts for about 9.37% of total assets, followed by Abb Ltd (ABBN.SW) and Schneider Electric Se (SU.FP).The top 10 holdings account for about 56.88% of total assets under management.Performance and RiskThe ETF has added roughly 12.59% and was up about 19.49% so far this year and in the past one year (as of 09/10/2024), respectively. GRID has traded between $85.32 and $123.14 during this last 52-week period.The ETF has a beta of 1.24 and standard deviation of 21.32% for the trailing three-year period, making it a high risk choice in the space. With about 109 holdings, it effectively diversifies company-specific risk.AlternativesFirst Trust NASDAQ Clean Edge Smart Grid Infrastructure 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, GRID is a sufficient option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.IShares Global Infrastructure ETF (IGF) tracks S&P Global Infrastructure Index and the Global X U.S. Infrastructure Development ETF (PAVE) tracks INDXX U.S. Infrastructure Development Index. IShares Global Infrastructure ETF has $3.97 billion in assets, Global X U.S. Infrastructure Development ETF has $7.60 billion. IGF has an expense ratio of 0.42% and PAVE charges 0.47%.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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>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 Clean Edge Smart Grid Infrastructure ETF (GRID): ETF Research Reports iShares Global Infrastructure ETF (IGF): ETF Research Reports Global X U.S. Infrastructure Development ETF (PAVE): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks