Should you consider adding First Trust Growth Strength ETF (FTGS) to your investment watchlist?

Overview of the First Trust Growth Strength ETF (FTGS)

If you're seeking comprehensive access to the Large Cap Growth sector within the U.S. stock market, the First Trust Growth Strength ETF (FTGS) is worth considering. This ETF, which operates with a passive management approach, was introduced on October 25, 2022.

Managed by First Trust Advisors, FTGS has accumulated over $1.27 billion in assets, positioning it as a mid-sized fund within the Large Cap Growth ETF category.

Understanding Large Cap Growth Investments

Large cap companies generally have market values exceeding $10 billion. These firms are often seen as more stable investments, offering lower risk and more predictable cash flows compared to their mid and small cap counterparts.

Growth stocks are characterized by above-average increases in sales and earnings. While they tend to outperform the broader market during bullish periods, their valuations are typically higher and they can be more volatile. In strong markets, growth stocks often lead, but they may underperform in less favorable conditions.

Expense Considerations

When evaluating ETFs, it's important to consider the expense ratio. All else being equal, funds with lower fees tend to deliver better net returns.

FTGS has an annual expense ratio of 0.6%, placing it among the pricier options in its category.

The ETF currently offers a trailing 12-month dividend yield of 0.16%.

Portfolio Breakdown and Major Holdings

Although ETFs provide diversification to reduce the impact of individual stock movements, it's still crucial to review the fund's specific holdings. Most ETFs, including FTGS, are transparent and disclose their portfolios daily.

Within FTGS, the Information Technology sector represents the largest portion at approximately 26.4%. The next largest sectors are Consumer Discretionary and Healthcare.

Among individual holdings, Arch Capital Group Ltd. (ACGL) makes up about 2.34% of the fund's assets, with Monolithic Power Systems, Inc. (MPWR) and Trane Technologies Plc (TT) following closely behind.

The top ten holdings collectively account for roughly 22.53% of the fund's total assets.

Performance and Risk Profile

FTGS aims to replicate the performance of the Growth Strength Index, which screens U.S. stocks based on liquidity, return on equity, long-term debt, revenue, and cash flow growth.

Year-to-date, the ETF has gained about 1.84%, and over the past year (as of 03/03/2026), it has risen approximately 15.09%. During the last 52 weeks, its price has ranged from $26.62 to $36.58.

With a beta of 1.12 and a three-year standard deviation of 16.43%, FTGS offers exposure to around 51 companies, helping to spread out company-specific risk.

Other ETF Choices

The First Trust Growth Strength ETF holds a Zacks ETF Rank of 3 (Hold), reflecting factors such as expected returns, fees, and momentum. While FTGS is a solid choice for those targeting the Large Cap Growth segment, investors may also want to explore additional options.

Alternatives include the Vanguard Growth Index Fund ETF Shares (VUG) and Invesco QQQ (QQQ), both of which track similar indexes. VUG manages $195.16 billion in assets with a 0.03% expense ratio, while QQQ oversees $398.45 billion and charges 0.18% in fees.

Key Takeaways

Both individual and institutional investors are increasingly drawn to passively managed ETFs due to their cost efficiency, transparency, flexibility, and tax advantages. These funds are particularly well-suited for long-term investment strategies.