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Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the First Trust Capital Strength ETF (FTCS) is a passively managed exchange traded fund launched on 07/06/2006.
The fund is sponsored by First Trust Advisors. It has amassed assets over $2.31 B, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.60%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.17%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 21.90% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Merck & Co., Inc. (MRK) accounts for about 2.26% of total assets, followed by Unitedhealth Group Incorporated (UNH) and Fleetcor Technologies, Inc. (FLT).
The top 10 holdings account for about 21.76% of total assets under management.
Performance and Risk
FTCS seeks to match the performance of the The Capital Strength Index before fees and expenses. The Capital Strength Index is an equal-dollar weighted index which provides exposure to well-capitalized companies with strong market positions based on strong balance sheets, high degree of liquidity, ability to generate earnings growth & record financial strength & profit growth.
The ETF return is roughly 14.40% so far this year and it's up approximately 5.72% in the last one year (as of 06/07/2019). In the past 52-week period, it has traded between $45.20 and $55.87.
The ETF has a beta of 0.90 and standard deviation of 12.09% for the trailing three-year period, making it a medium risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.