ETF Research Center

The First Trust NASDAQ Pharmaceutical ETF tracks the most liquid US pharmaceutical companies, weighted according to factors related to value, volatility, and growth.

FUND BASICS
Category	US Equities
Fund Sponsor	First Trust
Website	www.ftportfolios.com
Inception date	Sep 20, 2016
Assets (mns)	$10
Currency	USD
Expense ratio	60 bp
Distributions	Quarterly

FUND STRUCTURE
Regulation	Open-Ended Fund
Custodian
Weighting	Multi-Factor
Index replication
Uses derivatives	No
Options available	No

SECTOR BREAKDOWN

CONSTITUENT BREAKDOWN
No. of constituents	28
Wgt avg mkt cap (mns)	$103,653
Large cap (>$10bn)	51.6%
Mid cap ($2-10bn)	26.0%
Small cap (<$2bn)	22.4%
Developed mkts	100.0%
Emerging mkts	0.0%

TOP TEN HOLDINGS
Total	63.6 %
BRISTOL-MYERS SQUIBB CO	9.6 %
JOHNSON & JOHNSON	8.9 %
PFIZER INC	8.6 %
MERCK & CO. INC.	8.6 %
ELI LILLY & CO	4.9 %
HORIZON PHARMA PLC	4.8 %
CATALENT INC	4.8 %
ZOETIS INC	4.8 %
INNOVIVA, INC.	4.4 %
ABBOTT LABORATORIES	4.3 %

TOP COUNTRY EXPOSURE
	UNITED STATES	83.2 %
	IRELAND	14.7 %
	BRITAIN	2.1 %

HISTORICAL PERFORMANCE info

	Custom date range	Compare to
	thru

Standardized Annual Returns (thru December 31)
Year-to-date	1 year	5 years	10 years	Since Incep.
22.1%	22.1%	--	--	6.3%

Market Correlations
versus...	Beta	R-squared
S&P500	1.01	63%
MSCI EAFE	0.88	39%
MSCI Emg. Mkts.	0.49	21%

Technical Indicators
Recent close	$23.92
30d moving avg.	$23.48
Annualized volatility	15.4%
Short interest (ETF)	0.0%
Relative strength (RSI)	66

Liquidity measures
Avg. volume (thou.)	1
Turnover	0.3%
Bid/Ask (% of price)	0.60%
ADV underlying (mns)	$5,522

Distributions

FINDING ALTERNATIVE FUNDS

Below is a list of 20 potential alternatives to the First Trust Nasdaq Pharmaceuticals ETF based on the alternatives' overlap in portfolio holdings with FTXH. Consider funds with lower expense ratios and/or higher ALTAR Score™ ratings as possible alternatives.

Benchmark ticker:

FTXH

Expense:

60 bp

ALTAR Score™:

4.2%

ALTERNATIVE ETFs BASED ON OVERLAP WITH FTXH
Ticker	Fund Name	Overlap¹ vs FTXH (%)	Expense ratio (bp)	Savings vs FTXH (bp)	ALTAR Score™ (%)	ALTAR vs FTXH (%)
PBE	Invesco Dynamic Biotechnology & Genome	55.8	57	3	10.5	+6.4
PJP	Invesco Dynamic Pharmaceuticals	55.8	56	4	10.5	+6.4
IHE	iShares DJ US Pharmaceuticals	54.8	42	18	4.9	+0.8
XPH	SPDR S&P Pharmaceuticals ETF	52.8	35	25	4.5	+0.3
IEIH	iShares Evolved U.S. Innovative Healthcare	44.1	18	42	3.8	-0.4
PPH	VanEck Vectors Pharmaceuticals	42.9	36	24	8.9	+4.7
XLV	Health Care Select Sector SPDR	37.2	13	47	6.8	+2.7
IYH	iShares US Healthcare	35.9	43	17	5.9	+1.8
FHLC	Fidelity MSCI Health Care	33.9	8	52	5.5	+1.3
VHT	Vanguard Health Care	33.0	10	50	5.5	+1.4
JHMH	John Hancock Multifactor Health Care	26.5	40	20	6.3	+2.1
IXJ	iShares S&P Global Healthcare	26.1	46	14	6.0	+1.8
DURA	VanEck Vectors Morningstar Durable Dividend	19.3	29	31	6.5	+2.3
RYH	Invesco S&P Equal Weight Healthcare	16.7	40	20	6.7	+2.5
FXH	First Trust Health Care Alphadex	16.1	63	-3	6.7	+2.5
SPHQ	Invesco S&P 500 Quality	14.7	15	45	5.4	+1.2
OUSA	O'Shares FTSE U.S. Quality Dividend	14.4	48	12	5.7	+1.5
HDV	iShares High Dividend	12.4	8	52	6.9	+2.8
DJD	Invesco Dow Jones Industrial Average Dividend	12.0	7	53	7.1	+2.9
ACT	AdvisorShares Vice	12.0	99	-39	7.2	+3.0

¹Overlap is the percentage of holdings by weight that are identical. For example, if Fund A has a 2% position in Apple, Inc. (AAPL) and Fund B has a 5% position, their overlapping position in AAPL is 2%.

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RESULTS & ESTIMATES

	2014	2015	2016	2017	2018	2019E	2020E
Sales per share	**	**	**	**	**	**	**
Earnings per share	**	**	**	**	**	**	**
Dividends per share	**	**	**	**	**	**	**
Book value per share	**	**	**	**	**	**	**

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

OTHER FUNDAMENTAL METRICS

Long term EPS growth est.	**%		Debt-to-equity	**x
Asset turnover	**%		Assets-to-equity	**x

Return on equity

Revision activity*

*Six months ago = 100

Net margins

Compound annual growth rates

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VALUATION METRICS

	2018	2019E	2020E
Price-to-sales	**	**	**
Price-to-earnings	**	**	**
Price-to-cash flow	**	**	**
Price-to-growth	**	**	**
Price-to-book value	**	**	**
Yield	**	**	**

Historical valuation trends

Forward multiple:	First Trust Nasdaq Pharmaceuticals
Relative to:	S&P500	MSCI EAFE	MSCI Emg. Mkts.	Other ETF:

UNDERWEIGHT

Below average appreciation potential. A rating of UNDERWEIGHT is assigned to ETFs with ALTAR Scores in the 2nd quintile (ranking higher than only 20%-40%) of their category. Typically, funds in this category consist of stocks trading at relatively expensive valuations and/or having below-average fundamentals.

ALTAR Score™

Calculation of ALTAR Score™
Avg. Return on Equity	20.5	%
Divided by: Fwd. P/BV	4.3	x
Less: Expense ratio	60	bp
Equals: ALTAR Score	4.2	%

More information on ALTAR Score™

MODERN PORTFOLIO THEORY info

CONSENSUS RECOMMENDATIONS: FUND CONSTITUENTS

COMPOSITE RATING	1.44	CATEGORY AVERAGE	1.55

The composite rating is a weighted average of analysts' consensus recommendations for individual ETF constituents, based on the following scale: BUY = 1; OVERWEIGHT = 1.5, HOLD = 2; UNDERWEIGHT = 2.5; and SELL = 3. Readers are cautioned that because analyst ratings tend to be inflated, the composite score may be more useful as a relative measure of sentiment between funds rather than as a stand-alone recommendation.