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

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 4, placing it in top 25%.

Index Details

The fund is sponsored by First Trust Advisors. It has amassed assets over $310.23 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

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 0.6%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.7%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 8.86% of total assets, followed by Bank Of America Corporation (BAC) and Jpmorgan Chase & Co. (JPM).

The top 10 holdings account for about 58.59% of total assets under management.

Performance and Risk

The ETF has added roughly 14.27% and it's up approximately 32.56% so far this year and in the past one year (as of 08/04/2026), respectively. FTXO has traded between $32.7 and $43.022 during this last 52-week period.

The ETF has a beta of 0.89 and standard deviation of 24.01% for the trailing three-year period. With about 51 holdings, it effectively diversifies company-specific risk.

Alternatives

First Trust NASDAQ Bank ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FTXO is a good option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

State Street 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. State Street SPDR S&P Bank ETF has $1.67 billion in assets, Invesco KBW Bank ETF has $6.82 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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This article originally published on Zacks Investment Research (zacks.com).

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