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

The First Trust Dow Jones Internet ETF (FDN) was launched on 06/19/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Internet 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.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 8, placing it in top 50%.Index DetailsThe fund is sponsored by First Trust Advisors. It has amassed assets over $6.91 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.CostsExpense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.Annual operating expenses for this ETF are 0.51%, making it on par with most peer products in the space.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.This ETF has heaviest allocation in the Information Technology sector--about 36% of the portfolio. Telecom and Consumer Discretionary round out the top three.Looking at individual holdings, Meta Platforms Inc. (class A) (META) accounts for about 11.09% of total assets, followed by Amazon.com, Inc. (AMZN) and Netflix, Inc. (NFLX).The top 10 holdings account for about 62.01% of total assets under management.Performance and RiskThe ETF has lost about -0.70% so far this year and it's up approximately 17.77% in the last one year (as of 03/04/2025). In that past 52-week period, it has traded between $183.68 and $266.98.The ETF has a beta of 1.16 and standard deviation of 28.71% 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 excellent 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.Invesco NASDAQ Internet ETF (PNQI) tracks NASDAQ Internet Index and the ARK Next Generation Internet ETF (ARKW) tracks N/A. Invesco NASDAQ Internet ETF has $840.29 million in assets, ARK Next Generation Internet ETF has $1.66 billion. PNQI has an expense ratio of 0.60% and ARKW charges 0.82%.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 Dow Jones Internet ETF (FDN): ETF Research Reports Amazon.com, Inc. (AMZN): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis Report ARK Next Generation Internet ETF (ARKW): ETF Research Reports Invesco NASDAQ Internet ETF (PNQI): ETF Research Reports Meta Platforms, Inc. (META): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks