Launched on 12/15/2020, the First Trust International Developed Capital Strength ETF (FICS) is a smart beta exchange traded fund offering broad exposure to the Foreign Large Growth ETF category of the market.

What Are Smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

The fund is managed by First Trust Advisors, and has been able to amass over $204.51 million, which makes it one of the average sized ETFs in the Foreign Large Growth ETF. Before fees and expenses, FICS seeks to match the performance of the INTERNATIONAL DEVLPD CAPITAL STRENGTH ID.

The International Developed Capital Strength Index provides exposure to well-capitalized companies in the developed markets outside of the U.S. with strong market positions that have the potential to provide their stockholders with a greater degree of stability and performance over time.

Cost & Other Expenses

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 FICS are 0.70%, which makes it on par with most peer products in the space.

It's 12-month trailing dividend yield comes in at 1.95%.

Sector Exposure and Top Holdings

ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

Looking at individual holdings, L'oreal S.a. (OR.FP) accounts for about 2.20% of total assets, followed by Gsk Plc (GSK.LN) and The Sage Group Plc (SGE.LN).