The First Trust NASDAQ Transportation ETF (FTXR) was launched on 09/20/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.09 billion, making it one of the larger ETFs in the Industrials ETFs. Before fees and expenses, FTXR seeks to match the performance of the Nasdaq US Smart Transportation Index.
The Nasdaq US Smart Transportation Index is a modified factor weighted index, designed to provide exposure to US companies within the transportation industry.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.60%.
The fund has a 12-month trailing dividend yield of 0.96%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For FTXR, it has heaviest allocation in the Industrials sector --about 69.6% of the portfolio --while Consumer Discretionary and Energy round out the top three.
Taking into account individual holdings, Ford Motor Company (F) accounts for about 7.84% of the fund's total assets, followed by General Motors Company (GM) and Union Pacific Corporation (UNP).
Its top 10 holdings account for approximately 58.53% of FTXR's total assets under management.
Performance and Risk
Year-to-date, the First Trust NASDAQ Transportation ETF has added roughly 16.92% so far, and was up about 38.55% over the last 12 months (as of 07/22/2026). FTXR has traded between $31.65 $45.66 in this past 52-week period.
The fund has a beta of 1.28 and standard deviation of 22.50% for the trailing three-year period. With about 44 holdings, it has more concentrated exposure than peers .
Alternatives
First Trust NASDAQ Transportation ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
U.S. Global Jets ETF (JETS) tracks U.S. Global Jets Index and the iShares U.S. Transportation ETF (IYT) tracks Dow Jones Transportation Average Index. U.S. Global Jets ETF has $812.69 million in assets, iShares U.S. Transportation ETF has $2.36 billion. JETS has an expense ratio of 0.60% and IYT changes 0.38%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs
Bottom Line
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First Trust NASDAQ Transportation ETF (FTXR): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).