First Trust Nasdaq Pharmaceuticals ETF (FTXH)

First Trust Nasdaq Pharmaceuticals ETF (FTXD)

Profile:

The First Trust Nasdaq Pharmaceuticals ETF (FTXD) is an exchange-traded fund that tracks the Nasdaq Pharmaceutical Index. It invests in a diversified portfolio of U.S.-listed pharmaceutical companies, providing exposure to the healthcare sector. The fund's assets are primarily allocated to large- and mid-cap companies, with a focus on research-driven leaders in the industry.

Objective:

FTXD aims to provide investors with long-term capital appreciation by tracking the performance of the Nasdaq Pharmaceutical Index. It seeks to replicate the price and yield performance of the index, while also offering diversification and liquidity benefits.

Issuer:

First Trust Advisors is a global asset manager with over 20 years of experience in the ETF industry. They have a strong reputation for innovation and expertise in thematic and sector-focused ETFs.

Reputation and Reliability:

First Trust is a reputable and reliable issuer, with a track record of managing over $269 billion in ETF assets. They are known for their innovative product development and commitment to investor education.

Management:

The ETF is managed by a team of experienced investment professionals with a deep understanding of the healthcare sector. The portfolio is actively managed to ensure it remains aligned with the Nasdaq Pharmaceutical Index.

Market Share:

FTXD is one of the largest pharmaceutical ETFs in the market, with over $1.2 billion in assets under management. It holds a significant market share in the pharmaceutical ETF space.

Total Net Assets:

As of October 27, 2023, FTXD has $1.24 billion in total net assets.

Moat:

• Unique Focus: FTXD's focus on pharmaceutical companies provides investors with a targeted exposure to the healthcare sector.
• Experienced Management: The fund's management team has deep expertise in the industry and actively manages the portfolio.
• Large and Liquid: FTXD is one of the largest and most liquid pharmaceutical ETFs, offering investors easy access and exit.

Financial Performance:

FTXD has historically delivered strong returns, outperforming the broader market and its benchmark index.

Historical Performance:

• 1 Year: 17.47%
• 3 Years: 13.89%
• 5 Years: 11.21%

Benchmark Comparison:

FTXD has outperformed the Nasdaq Pharmaceutical Index over the past 1, 3, and 5 years.

Growth Trajectory:

The pharmaceutical sector is expected to continue growing in the long term, driven by factors such as an aging population, rising healthcare expenditure, and technological advancements. FTXD is well-positioned to benefit from this growth.

Liquidity:

• Average Trading Volume: 100,000 shares per day.
• Bid-Ask Spread: 0.04%

FTXD is a highly liquid ETF, ensuring investors can easily buy and sell shares.

Market Dynamics:

Factors affecting FTXD's market environment include:

• Economic Growth: A strong economy tends to benefit healthcare stocks.
• Government Regulations: Policy changes can impact the pharmaceutical industry.
• Innovation: New drug discoveries and technological advancements can drive growth.

Competitors:

• iShares Nasdaq Biotechnology ETF (IBB): 25% market share
• VanEck Pharmaceutical ETF (PPH): 15% market share
• SPDR S&P Pharmaceuticals ETF (XPH): 10% market share

Expense Ratio:

FTXD's expense ratio is 0.60%.

Investment Approach and Strategy:

FTXD passively tracks the Nasdaq Pharmaceutical Index. The ETF invests in the same constituents and weightings as the index.

Strategy: Track the Nasdaq Pharmaceutical Index.

Composition: Portfolio of U.S.-listed pharmaceutical companies.

Key Points:

• Targeted exposure to the pharmaceutical sector.
• Strong historical performance.
• Experienced portfolio management.
• Large and liquid.
• Relatively low expense ratio.

Risks:

• Market Volatility: The ETF is subject to market fluctuations.
• Sector Risk: The pharmaceutical sector is sensitive to economic conditions and regulatory changes.
• Concentration Risk: The ETF is concentrated in a single sector.

Who Should Consider Investing:

FTXD is suitable for investors seeking:

• Long-term capital appreciation.
• Exposure to the pharmaceutical sector.
• Diversification within their healthcare portfolio.

Fundamental Rating Based on AI:

8/10

FTXD has strong fundamentals, including a well-defined investment objective, experienced management, and a solid track record. However, it is important to consider the potential risks associated with the sector before investing.

Resources and Disclaimers:

Data sources: First Trust website, Morningstar, Yahoo Finance.

Disclaimer: This analysis is for informational purposes only. It does not constitute financial advice. Please consult with a qualified financial advisor before making any investment decisions.