The First Trust Dow Jones Internet ETF (FDN – Free Report) was released on 06/19/2006, and is a passively managed trading fund designed to provide broad insight into the technology – Networking of the equity market.
Passively managed ETFs are growing in popularity with corporate and retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long-term investors.
Additionally, ETFs provide an efficient way to gain low-cost and diversified exposure to a broad mix of companies. Technology – Internet is one of the 16 broad Zacks sectors in the Zacks Industry Comparison. He is currently in 5th place, posting over 31%.
The fund is sponsored by First Trust Advisors. It has amassed assets of over $3.97 billion, making it one of the largest ETFs that attempt to match the performance of the equity market. FDN seeks to match the performance of the Dow Jones Internet Composite Index before fees and expenses.
The Dow Jones Internet Composite Index consists only of Internet-related companies.
Investors should pay attention to the ETF’s expense ratio. Low-cost products produce better results than high-priced ones, assuming all other parameters remain the same.
Annual operating expenses for this ETF are 0.51%, which compares favorably with most peer products in the space.
Area Report and High Definitions
While ETFs offer a variety of exposures that reduce the risk of a single asset, investors should focus on the actual holdings in the fund. Fortunately, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has a very heavy allocation in the information technology sector – about 46% of the portfolio. Telecom and Consumer Discretionary cover the three managers.
Looking at individual holdings, Amazon.com, Inc. (AMZN – Independent Display) about 9.11% of the total assets, followed by Meta Platforms Inc. (table A) (META – Free demo) and Cisco Systems, Inc. (CSCO – Free report) .
The top 10 holders account for 49.76% of total assets under management.
Action and Damage
The ETF has added about 11.77% and is down about -27.79% so far this year and one year ago (as of 01/24/2023). FDN has traded between $116.11 and $201.45 over the past 52 weeks.
The ETF has a beta of 1.08 and a standard deviation of 34.59% over the past three years, making it the top pick in the space. With 43 holdings, it has more information than its peers.
The First Trust Dow Jones Internet ETF has a Zacks ETF Rank of 2 (Buy), which is based on expected stock class returns, expense ratios, and timing, among other factors. . Because of this, FDN is an excellent choice for investors looking to gain exposure to the Technology ETFs sector of the market. There are other ETFs out there that investors can also consider.
Invesco NASDAQ Internet ETF (PNQI – Independent Index) tracks the NASDAQ Internet Index and the ARK Next Generation Internet ETF (ARKW – Free demo) tracks N/A. Invesco NASDAQ Internet ETF is worth $496.49 million, while ARK Next Generation Internet ETF has $1.20 billion. PNQI has a yield of 0.60% and ARKW has a yield of 0.83%.
For more information about this product and other ETFs, please visit the Zacks ETF Center.