Launched on 09/20/2016, the First Trust NASDAQ Bank ETF (FTXO) is a smart beta exchange traded fund offering broad exposure to the Financials ETFs category of the market.What Are Smart Beta ETFs?For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.Fund Sponsor & IndexFTXO is managed by First Trust Advisors, and this fund has amassed over $325.69 million, which makes it one of the average sized ETFs in the Financials ETFs. Before fees and expenses, FTXO seeks to match the performance of the Nasdaq US Smart Banks Index.The Nasdaq US Smart Banks Index is a modified factor weighted index, designed to provide exposure to US companies within the banking industry.Cost & Other ExpensesWhen considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.It's 12-month trailing dividend yield comes in at 1.54%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.Representing 100% of the portfolio, the fund has heaviest allocation to the Financials sector.Taking into account individual holdings, New York Community Bancorp, Inc. (NYCB) accounts for about 8.24% of the fund's total assets, followed by The Pnc Financial Services Group, Inc. (PNC) and Popular, Inc. (BPOP).FTXO's top 10 holdings account for about 58.96% of its total assets under management.Performance and RiskThe ETF has gained about 3.86% and it's up approximately 31.82% so far this year and in the past one year (as of 01/20/2022), respectively. FTXO has traded between $25.11 and $37 during this last 52-week period.The fund has a beta of 1.32 and standard deviation of 38.98% for the trailing three-year period. With about 30 holdings, it has more concentrated exposure than peers.AlternativesFirst Trust NASDAQ Bank ETF is an excellent option for investors seeking to outperform the Financials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.Invesco KBW Bank ETF (KBWB) tracks KBW Nasdaq Bank index and the SPDR S&P Bank ETF (KBE) tracks S&P Banks Select Industry Index. Invesco KBW Bank ETF has $3.19 billion in assets, SPDR S&P Bank ETF has $3.87 billion. KBWB has an expense ratio of 0.35% and KBE charges 0.35%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Financials ETFs.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. 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(BPOP): Free Stock Analysis Report New York Community Bancorp, Inc. (NYCB): Free Stock Analysis Report SPDR S&P Bank ETF (KBE): ETF Research Reports Invesco KBW Bank ETF (KBWB): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research