Is First Trust NASDAQ Transportation ETF (FTXR) a Strong ETF Right Now?

The First Trust NASDAQ Transportation ETF (FTXR) was launched on 09/20/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Industrials ETFs 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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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 & IndexThe fund is managed by First Trust Advisors. FTXR has been able to amass assets over $945.02 million, making it one of the average sized ETFs in the Industrials ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Nasdaq US Smart Transportation Index.The Nasdaq US Smart Transportation Index is a modified factor weighted index, designed to provide exposure to US companies within the transportation industry.Cost & Other ExpensesSince 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.The fund has a 12-month trailing dividend yield of 1.21%.Sector Exposure and Top HoldingsMost ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.Representing 68.1% of the portfolio, the fund has heaviest allocation to the Industrials sector; Consumer Discretionary and Energy round out the top three.When you look at individual holdings, General Motors Company (GM) accounts for about 8.09% of the fund's total assets, followed by Union Pacific Corporation (UNP) and Tesla, Inc. (TSLA).The top 10 holdings account for about 58.23% of total assets under management.Performance and RiskSo far this year, FTXR return is roughly 7.58%, and is up about 45.35% in the last one year (as of 05/07/2026). During this past 52-week period, the fund has traded between $29.96 and $43.10.FTXR has a beta of 1.27 and standard deviation of 22.26% for the trailing three-year period. With about 44 holdings, it has more concentrated exposure than peers .AlternativesFirst Trust NASDAQ Transportation ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.U.S. Global Jets ETF (JETS) tracks U.S. Global Jets Index and the iShares U.S. Transportation ETF (IYT) tracks Dow Jones Transportation Average Index. U.S. Global Jets ETF has $776.42 million in assets, iShares U.S. Transportation ETF has $2.06 billion. JETS has an expense ratio of 0.60% and IYT changes 0.38%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFsBottom 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks