26-05-2025
Should You Invest in the First Trust Indxx NextG ETF (NXTG)?
Looking for broad exposure to the Technology - Telecom segment of the equity market? You should consider the First Trust Indxx NextG ETF (NXTG), a passively managed exchange traded fund launched on 02/17/2011.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Telecom is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
The fund is sponsored by First Trust Advisors. It has amassed assets over $364.44 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Telecom segment of the equity market. NXTG seeks to match the performance of the INDXX 5G & NEXTG THEMATIC INDEX before fees and expenses.
The Indxx 5G & NextG Thematic Index tracks the performance of companies engaged in the smartphone segment of the telecom and technology sectors.
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 0.70%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.45%.
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.
Looking at individual holdings, Xiaomi Corporation (class B) ( accounts for about 2.14% of total assets, followed by Nec Corporation ( and Zte Corporation (class H) (
The top 10 holdings account for about 15.71% of total assets under management.
The ETF has added about 6.80% so far this year and was up about 16.26% in the last one year (as of 05/26/2025). In that past 52-week period, it has traded between $74.67 and $92.10.
The ETF has a beta of 0.87 and standard deviation of 17.76% for the trailing three-year period. With about 109 holdings, it effectively diversifies company-specific risk.
First Trust Indxx NextG 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, NXTG is a reasonable option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.
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First Trust Indxx NextG ETF (NXTG): ETF Research Reports
This article originally published on Zacks Investment Research (
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