The First Trust NASDAQ Bank ETF (FTXO) made its debut on 09/20/2016, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs category of the market.What Are Smart Beta ETFs?The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.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 & IndexManaged by First Trust Advisors, FTXO has amassed assets over $207.63 million, making it one of the average sized ETFs in the Financials ETFs. This particular fund seeks to match the performance of the Nasdaq US Smart Banks Index before fees and expenses.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 ExpensesCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.With on par with most peer products in the space, this ETF has annual operating expenses of 0.60%.The fund has a 12-month trailing dividend yield of 2.69%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Financials sector - about 100% of the portfolio.Looking at individual holdings, M&t Bank Corporation (MTB) accounts for about 8.35% of total assets, followed by Wells Fargo & Company (WFC) and Popular, Inc. (BPOP).The top 10 holdings account for about 60.25% of total assets under management.Performance and RiskThe ETF has lost about -19.99% so far this year and is down about -17.57% in the last one year (as of 09/29/2022). In the past 52-week period, it has traded between $25.42 and $37.The ETF has a beta of 1.18 and standard deviation of 40.34% for the trailing three-year period. With about 31 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 $1.93 billion in assets, SPDR S&P Bank ETF has $1.98 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. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Trust NASDAQ Bank ETF (FTXO): ETF Research Reports Wells Fargo & Company (WFC): Free Stock Analysis Report M&T Bank Corporation (MTB): Free Stock Analysis Report Popular, Inc. (BPOP): 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