Should You Invest in the First Trust NASDAQ Transportation ETF (FTXR)?
Sector ETF report for FTXR
The First Trust NASDAQ Transportation ETF (FTXR) was launched on 09/20/2016, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Transportation/Shipping segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Transportation/Shipping is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.20 billion, making it one of the average sized ETFs attempting to match the performance of the Industrials - Transportation/Shipping segment of the equity market. FTXR seeks to match the performance of the Nasdaq US Smart Transportation Index before fees and expenses.
The Nasdaq US Smart Transportation Index is a modified factor weighted index, designed to provide exposure to US companies within the transportation industry.
Investors 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 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.61%.
Sector Exposure and Top Holdings
Even 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 Industrials sector--about 78.50% of the portfolio, followed by Consumer Discretionary.
Looking at individual holdings, Expeditors International Of Washington, Inc. (EXPD) accounts for about 7.43% of total assets, followed by Old Dominion Freight Line, Inc. (ODFL) and Ford Motor Company (F).
The top 10 holdings account for about 55.03% of total assets under management.
Performance and Risk
The ETF return is roughly 21.41% and is up about 19.03% so far this year and in the past one year (as of 12/20/2021), respectively. FTXR has traded between $27.55 and $35.96 during this last 52-week period.
The ETF has a beta of 1.38 and standard deviation of 30.33% for the trailing three-year period. With about 30 holdings, it has more concentrated exposure than peers.
First Trust NASDAQ Transportation 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, FTXR is an outstanding option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares U.S. Transportation ETF (IYT) tracks Dow Jones Transportation Average Index and the U.S. Global Jets ETF (JETS) tracks U.S. Global Jets Index. IShares U.S. Transportation ETF has $1.73 billion in assets, U.S. Global Jets ETF has $3.06 billion. IYT has an expense ratio of 0.41% and JETS charges 0.60%.
To 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.
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First Trust NASDAQ Transportation ETF (FTXR): ETF Research Reports
Ford Motor Company (F): Free Stock Analysis Report
Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report
Old Dominion Freight Line, Inc. (ODFL): Free Stock Analysis Report
iShares U.S. Transportation ETF (IYT): ETF Research Reports
U.S. Global Jets ETF (JETS): ETF Research Reports
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