Designed to provide broad exposure to the Financials - Banking segment of the equity market, the First Trust NASDAQ Bank ETF (FTXO) is a passively managed exchange traded fund launched on September 20, 2016.
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. Financials - Banking is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $252 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Banking segment of the equity market. FTXO seeks to match the performance of the Nasdaq US Smart Banks Index before fees and expenses.
The Nasdaq US Smart Banks Index is a modified factor weighted index, designed to provide exposure to US companies within the banking industry.
Costs
Expense 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 0.6%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.93%.
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 Financials sector -- about 100% of the portfolio.
Looking at individual holdings, Citigroup Inc. (C) accounts for about 8.98% of total assets, followed by Jpmorgan Chase & Co. (JPM) and Bank Of America Corporation (BAC).
The top 10 holdings account for about 59.67% of total assets under management.
Performance and Risk
Year-to-date, the First Trust NASDAQ Bank ETF has gained about 14.21% so far, and it's up approximately 26.77% over the last 12 months (as of 09/25/2025). FTXO has traded between $25.916 and $36.567 in this past 52-week period.
The ETF has a beta of 0.98 and standard deviation of 27.1% for the trailing three-year period. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ Bank 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, FTXO is an outstanding option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
SPDR S&P Bank ETF (KBE) tracks S&P Banks Select Industry Index and the Invesco KBW Bank ETF (KBWB) tracks KBW Nasdaq Bank index. SPDR S&P Bank ETF has $1.52 billion in assets, Invesco KBW Bank ETF has $5.22 billion. KBE has an expense ratio of 0.35%, and KBWB charges 0.35%.
Bottom Line
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 Bank ETF (FTXO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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