Is First Trust NASDAQ Semiconductor ETF (FTXL) a Strong ETF Right Now?

The First Trust NASDAQ Semiconductor ETF (FTXL) made its debut on 09/20/2016, and is a smart beta exchange traded fund that provides broad exposure to the Technology ETFs category of the market.What Are Smart Beta ETFs?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.Fund Sponsor & IndexBecause the fund has amassed over $254.15 million, this makes it one of the average sized ETFs in the Technology ETFs. FTXL is managed by First Trust Advisors. 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.Cost & Other ExpensesCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.Annual operating expenses for FTXL are 0.60%, which makes it on par with most peer products in the space.The fund has a 12-month trailing dividend yield of 0.58%.Sector Exposure and Top HoldingsETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.For FTXL, it has heaviest allocation in the Information Technology sector --about 100% of the portfolio.Looking at individual holdings, Broadcom Inc. (AVGO) accounts for about 11.73% of total assets, followed by Nvidia Corporation (NVDA) and Qualcomm Incorporated (QCOM).FTXL's top 10 holdings account for about 65.17% of its total assets under management.Performance and RiskSo far this year, FTXL has lost about -7.26%, and is down about -8.08% in the last one year (as of 03/17/2025). During this past 52-week period, the fund has traded between $76.95 and $107.11.FTXL has a beta of 1.24 and standard deviation of 34.37% for the trailing three-year period. With about 32 holdings, it has more concentrated exposure than peers.AlternativesFirst Trust NASDAQ Semiconductor ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which 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 $11.51 billion in assets, VanEck Semiconductor ETF has $20.57 billion. SOXX has an expense ratio of 0.35% and SMH charges 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 Technology ETFs.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 Semiconductor ETF (FTXL): ETF Research Reports QUALCOMM Incorporated (QCOM): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report VanEck Semiconductor ETF (SMH): ETF Research Reports iShares Semiconductor ETF (SOXX): 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