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 09/20/2016.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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. Financials - Banking is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.

The fund is sponsored by First Trust Advisors. It has amassed assets over $239.54 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.

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 0.60%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.99%.

ETFs 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 Financials sector--about 100% of the portfolio.

Looking at individual holdings, Jpmorgan Chase & Co. (JPM) accounts for about 8.42% of total assets, followed by Citigroup Inc. (C) and Wells Fargo & Company (WFC).

The top 10 holdings account for about 59.72% of total assets under management.

So far this year, FTXO return is roughly 10.90%, and it's up approximately 21.07% in the last one year (as of 07/24/2025). During this past 52-week period, the fund has traded between $25.92 and $35.28.

The ETF has a beta of 0.94 and standard deviation of 27.42% for the trailing three-year period. With about 51 holdings, it effectively diversifies company-specific risk.

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 a great 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 $1.62 billion in assets, Invesco KBW Bank ETF has $4.86 billion. KBE has an expense ratio of 0.35% and KBWB charges 0.35%.

First Trust NASDAQ Bank ETF (FTXO): ETF Research Reports

Wells Fargo & Company (WFC) : Free Stock Analysis Report

JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report

Citigroup Inc. (C) : Free Stock Analysis Report

SPDR S&P Bank ETF (KBE): ETF Research Reports

Invesco KBW Bank ETF (KBWB): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

Should You Invest in the First Trust NASDAQ Bank ETF (FTXO)?

The article discusses the First Trust NASDAQ Bank ETF (FTXO), a passively managed ETF tracking the NASDAQ US Smart Banks Index. It highlights the fund's expense ratio of 0.60%, asset size of over $239.54 million, and top holdings including JPMorgan Chase & Co. (JPM), Citigroup Inc. (C), and Wells Fargo & Company (WFC). The ETF has a 12-month dividend yield of 1.99% and a 52-week price range of $25.92 to $35.28. It compares FTXO to other bank ETFs like SPDR S&P Bank ETF (KBE) and Invesco KBW Bank ETF (KBWB), noting their larger asset sizes and lower expense ratios.