5 Popular First Trust ETFs For Specific Tech Industry Plays

First Trust ETFs collectively have over $100 billion in assets. Here we'll check out some popular First Trust ETFs for narrow tech industries.

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Introduction – First Trust ETFs

While the website for First Trust may look antiquated, its ETFs are not. The most popular First Trust ETFs are focused on sub-sectors of technology, and the new Communications sector.

Since these sectors are broad, some investors prefer to focus on specific tech industries via the following funds.

FDN – First Trust Dow Jones Internet Index Fund

FDN seeks to track the Dow Jones Internet Composite Index, 40 of the largest companies in the U.S. related to internet commerce and internet services. Notable examples include Amazon, Facebook, Netflix, Salesforce, Twitter, Cisco, eBay, Pinterest, DocuSign, Etsy, Wayfair, Dropbox, and more. FDN has outperformed the NASDAQ-100, the S&P 500, and the Technology sector since its inception in 2006. The fund has over $10 billion in assets and an expense ratio of 0.52%.

SKYY – First Trust ISE Cloud Computing Index Fund

SKYY targets the narrow cloud computing market segment. Companies are close to equally weighted within the fund, with a cap of a 4.5% weight, to prevent concentration. The fund's index from First Trust takes stocks that can be classified as Infrastructure as a Service (IaaS), Platform as a Service (PaaS), or Software as a Service (SaaS), and then applies additional size, liquidity, and tradability screens. Notable names in this fund include Amazon, MongoDB, Oracle, Alphabet (Google), Cisco, Adobe, etc. This ETF has an expense ratio of 0.60%

CIBR – First Trust NASDAQ Cybersecurity ETF

CIBR seeks to track the Nasdaq CTA Cybersecurity Index, composed of companies engaged in the cybersecurity segment of the technology and industrials sectors. CIBR has significant small- and mid-cap exposure, and companies are weighted within the fund by liquidity. The fund has over $3 billion in assets and an expense ratio of 0.60%.

QTEC – First Trust NASDAQ-100-Technology Sector Index Fund

QTEC only holds large-cap Technology stocks listed on the NASDAQ. Investors like QTEC for its equal weighting of companies within the fund. QTEC is almost entirely software, IT, and semiconductors. As such, QTEC is suitable for a tactical tilt but is likely not ideal for a long-term hold. The fund has over $3 billion in assets and an expense ratio of 0.57%.

FXL – First Trust Technology AlphaDEX® Fund

FXL employs First Trust's AlphaDEX® methodology on the Russell 1000 Index by ranking stocks on a variety of growth and value factors including momentum, Return on Equity, book value, and more. Basically, the complex methodology aims to identify companies with strong fundamentals that are expected to outperform the market. The fund has over $2 billion in assets and an expense ratio of 0.61%.

Where To Buy These First Trust ETFs

All the above First Trust ETFs should be available at any major broker. My choice is M1 Finance. The broker has zero trade commissions and zero account fees, and offers fractional shares, dynamic rebalancing, intuitive pie visualization, and a sleek, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.

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Disclaimer:  While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a research report. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. I mention M1 Finance a lot around here. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. Hypothetical examples used, such as historical backtests, do not reflect any specific investments, are for illustrative purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.