First Trust Nasdaq Semiconductor ETF

FTXL

Market cap $2.24B

First Trust Nasdaq Semiconductor ETF employs a sort of smart beta approach, emphasizing quality and momentum over market-cap weighting. FTXL currently overweights Intel and Micron, driving recent outperformance but also increasing portfolio concentration. FTXL's methodology has delivered benefits over 3 years, with strong sector EPS and revenue growth forecasts supporting a positive outlook.

The First Trust Nasdaq Semiconductor ETF might be the most underrated chipmaker ETF on the market. The ETF has returned some 161% over the past 12 months.

Semiconductor ETFs came under pressure Tuesday as a sharp sell-off in South Korea's technology sector spilled over into U.S. chip stocks, raising concerns about the durability of the artificial intelligence-driven rally ahead of a closely watched earnings report from Micron Technology Inc (NASDAQ:MU).

A smart beta exchange traded fund, the First Trust NASDAQ Semiconductor ETF (FTXL) debuted on 09/20/2016, and offers broad exposure to the Technology ETFs category of the market.

Equities extend gains as earnings and semiconductors lead markets higher. Consumer confidence remains subdued despite economic resilience.

After three years of hyperscaler capital spending feeding through to chip designers, foundry capacity, and lithography backlogs, the semiconductor ETF complex has separated into distinct buckets.

Looking for broad exposure to the Technology - Semiconductors segment of the equity market? You should consider the First Trust NASDAQ Semiconductor ETF (FTXL), a passively managed exchange traded fund launched on September 20, 2016.

Nvidia Corporation remains the linchpin of the AI-driven semiconductor sector, underpinning structural shifts in industry valuation and cyclicality. The semiconductor industry is transitioning from cyclical to increasingly non-cyclical, driven by AI, cloud, automation, and automotive demand. Memory stocks like STX and WDC have experienced dramatic re-ratings, reflecting the market's new view on their cyclicality and growth prospects.

Some exchange-traded funds offer the safety of diversification at the expense of eye-popping returns. This year, returns are the story, especially at funds that hold big slugs of red-hot chip shares.

Several years ago, semiconductor ETFs were often viewed as a Nvidia (NVDA) story. With Nvidia driving much of the group's growth and performance, some investors questioned the need for broader exposure.