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

Launched on 09/20/2016, the First Trust NASDAQ Semiconductor ETF (FTXL) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Semiconductors 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. Technology - Semiconductors 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 $1.43 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.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 0.60%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 0.50%.Sector Exposure and Top HoldingsETFs offer a 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.This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.Looking at individual holdings, Intel Corporation (INTC) accounts for about 8.42% of total assets, followed by Broadcom Inc. (AVGO) and Applied Materials, Inc. (AMAT).The top 10 holdings account for about 60.59% of total assets under management.Performance and RiskThe ETF has added roughly 14.33% so far this year and is up about 49.07% in the last one year (as of 10/28/2024). In that past 52-week period, it has traded between $62.18 and $107.11.The ETF has a beta of 1.24 and standard deviation of 34.71% 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 1 (Strong 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 $14.72 billion in assets, VanEck Semiconductor ETF has $25.09 billion. SOXX has an expense ratio of 0.35% 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.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 Intel Corporation (INTC): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report VanEck Semiconductor ETF (SMH): ETF Research Reports iShares Semiconductor ETF (SOXX): 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