FTXG Profile
The First Trust Nasdaq Food & Beverage ETF is designed to provide investors with targeted exposure to the U.S. food and beverage sector. Under normal market conditions, the fund allocates at least 90% of its net assets, including any investment borrowings, into common stocks and depositary receipts that are part of the underlying index. This strategic focus ensures that the majority of the fund’s investments are directly tied to the performance of companies within the food and beverage industry.
The underlying index is specifically crafted to reflect the performance of U.S. companies within the food and beverage sector. It selects firms based on their liquidity and weights them according to a cumulative score derived from three key investment factors: volatility, value, and growth. This methodical approach allows the index to capture companies that not only have significant market presence but also exhibit favorable characteristics in terms of financial stability, growth potential, and relative value.
By concentrating on these factors, the fund aims to offer a diversified representation of the food and beverage sector, despite being non-diversified itself. This approach seeks to balance the inherent risks and opportunities within the sector, providing investors with a vehicle that reflects both the stability and growth prospects of established food and beverage companies.
As a non-diversified fund, it may have a higher concentration of assets in a narrower sector compared to diversified funds. However, this focused strategy is intended to capitalize on sector-specific trends and opportunities, potentially delivering targeted returns based on the performance of the food and beverage industry. The fund’s management team actively monitors and adjusts its holdings to align with the index's criteria, ensuring that the portfolio remains representative of the sector's leading firms.
|
