Should You Invest in the First Trust NASDAQ Semiconductor ETF (FTXL)?

Looking for broad exposure to the Technology - Semiconductors segment of the equity market? You should consider the First Trust NASDAQ Semiconductor ETF (FTXL), a passively managed exchange traded fund launched on September 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.Investor-friendly, sector ETFs provide many options 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 2, placing it in top 13%.Index DetailsThe fund is sponsored by First Trust Advisors. It has amassed assets over $1.49 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.CostsInvestors 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 0.6%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 0.25%.Sector Exposure and Top HoldingsEven 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 Information Technology sector -- about 100% of the portfolio.Looking at individual holdings, Micron Technology, Inc. (MU) accounts for about 11.76% of total assets, followed by Intel Corporation (INTC) and Broadcom Inc. (AVGO).The top 10 holdings account for about 64.68% of total assets under management.Performance and RiskThe ETF has gained about 11.71% and it's up approximately 63.7% so far this year and in the past one year (as of 01/15/2026), respectively. FTXL has traded between $62.37 and $145.77 during this last 52-week period.The ETF has a beta of 1.41 and standard deviation of 33.94% for the trailing three-year period. With about 32 holdings, it has more concentrated exposure than peers.AlternativesFirst Trust NASDAQ Semiconductor ETF holds a Zacks ETF Rank of 2 (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 $19.32 billion in assets, VanEck Semiconductor ETF has $41.03 billion. SOXX has an expense ratio of 0.34%, and SMH charges 0.35%.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 NASDAQ Semiconductor ETF (FTXL): 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