The First Trust NASDAQ Bank ETF (FTXO), a smart beta fund tracking the Nasdaq US Smart Banks Index, manages $237.9 million in assets with a 0.60% expense ratio. Heavily concentrated in the financials sector with top holdings including J.P. Morgan Chase, Citigroup, and Wells Fargo, FTXO has delivered strong performance, posting 10.05% year-to-date and 21.43% one-year returns as of July 25, 2025. While positioned as an option for outperformance in the banking sector, its expense ratio is higher compared to larger alternatives like the SPDR S&P Bank ETF (KBE) and Invesco KBW Bank ETF (KBWB), which command significantly greater assets under management.
The First Trust NASDAQ Bank ETF (FTXO) is a smart beta fund providing factor-weighted exposure to the US banking sector, differentiating itself from traditional market-cap weighted indexes. It has demonstrated strong recent performance, with a 21.43% return over the last year and a 10.05% gain year-to-date as of July 25, 2025. The fund's portfolio is highly concentrated in the financials sector, with its top 10 holdings, including JPMorgan Chase & Co. (8.42%), Citigroup Inc., and Wells Fargo & Company, constituting 59.72% of its total assets. While its beta of 0.94 suggests slightly lower market volatility, its trailing three-year standard deviation of 27.41% indicates a history of significant price fluctuations. A key consideration for investors is its cost structure; with an annual expense ratio of 0.60% and assets under management of $237.9 million, FTXO is more expensive and smaller than major competitors like the SPDR S&P Bank ETF (KBE) and the Invesco KBW Bank ETF (KBWB), which both have expense ratios of 0.35% and command multi-billion dollar asset bases.
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strongly positive
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