Should First Trust Growth Strength ETF (FTGS) Be on Your Investing Radar?

If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the First Trust Growth Strength ETF (FTGS), a passively managed exchange traded fund launched on October 25, 2022.

The fund is sponsored by First Trust Advisors. It has amassed assets over $1.27 billion, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.

Why Large Cap Growth

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Further, growth stocks have a higher level of volatility associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.6%, making it one of the more expensive products in the space.

It has a 12-month trailing dividend yield of 0.16%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector -- about 26.4% of the portfolio. Consumer Discretionary and Healthcare round out the top three.

Looking at individual holdings, Arch Capital Group Ltd. (ACGL) accounts for about 2.34% of total assets, followed by Monolithic Power Systems, Inc. (MPWR) and Trane Technologies Plc (TT).

The top 10 holdings account for about 22.53% of total assets under management.

Performance and Risk

FTGS seeks to match the performance of the THE GROWTH STRENGTH INDEX before fees and expenses. The Growth Strength Index provides exposure to a mix of domestic equities with filters for liquidity, return on equity, long-term debt, revenue and cash flow growth.

The ETF has added roughly 1.84% so far this year and it's up approximately 15.09% in the last one year (as of 03/03/2026). In the past 52-week period, it has traded between $26.62 and $36.58.

The ETF has a beta of 1.12 and standard deviation of 16.43% for the trailing three-year period. With about 51 holdings, it effectively diversifies company-specific risk.

Alternatives

First Trust Growth Strength ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FTGS is a good option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.

The Vanguard Growth Index Fund ETF Shares (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth Index Fund ETF Shares has $195.16 billion in assets, Invesco QQQ has $398.45 billion. VUG has an expense ratio of 0.03% and QQQ charges 0.18%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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First Trust Growth Strength ETF (FTGS): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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