The First Trust Growth Strength ETF (FTGS) was launched on 10/25/2022, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of 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 & Index
The fund is managed by First Trust Advisors, and has been able to amass over $1.29 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Growth. This particular fund seeks to match the performance of the THE GROWTH STRENGTH INDEX before fees and expenses.
The Growth Strength Index provides exposure to a mix of domestic equities with filters for liquidity, return on equity, long-term debt, revenue and cash flow growth.
Cost & Other Expenses
Cost 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.
With one of the more expensive products in the space, this ETF has annual operating expenses of 0.60%.
It's 12-month trailing dividend yield comes in at 0.16%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
FTGS's heaviest allocation is in the Information Technology sector, which is about 27% of the portfolio. Its Financials and Healthcare round out the top three.
When you look at individual holdings, Eli Lilly And Company (LLY) accounts for about 2.52% of the fund's total assets, followed by Slb Ltd. (SLB) and Incyte Corporation (INCY).
The top 10 holdings account for about 23.01% of total assets under management.
Performance and Risk
So far this year, FTGS has gained about 3.17%, and is up roughly 16.82% in the last one year (as of 01/13/2026). During this past 52-week period, the fund has traded between $26.62 and $36.58.
The fund has a beta of 1.12 and standard deviation of 16.48% for the trailing three-year period. With about 51 holdings, it effectively diversifies company-specific risk .
Alternatives
First Trust Growth Strength ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Growth ETF (VUG) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Growth ETF has $205.62 billion in assets, Invesco QQQ has $413.12 billion. VUG has an expense ratio of 0.04% and QQQ changes 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth
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 Growth Strength ETF (FTGS): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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