QABA: FIRST TRUST NASDAQ ABA COMMUNITY BANK INDEX FUND
ETF Education Report: FIRST TRUST NASDAQ ABA COMMUNITY BANK INDEX FUND (QABA)
What this ETF is trying to do
The FIRST TRUST NASDAQ ABA COMMUNITY BANK INDEX FUND (ticker: QABA) is an exchange-traded fund (ETF) that focuses on community banks. Instead of investing in giant global banks, this fund looks at a group of 162 different holdings to provide exposure to the community banking sector.
What the numbers show
When looking at an ETF, it is important to understand two different types of returns: price return and total return.
• Price Return: This measures only the change in the share price. For QABA, the one-year price return was approximately 14.43%. The year-to-date (YTD) price return was approximately 14.45%. Over three years, the price return was approximately 63.68%.
• Total Return: This is a more complete measure because it includes the value of distributions (cash payments) paid out to investors. The one-year total return was approximately 17.30%, and the YTD total return was approximately 16.36%. Over three years, the total return was approximately 76.52%.
To give you an idea of price movement, the current price is $64.85. The estimated price from roughly one year ago was approximately $56.67.
Income and distribution explanation
Some investors look for ETFs that pay them cash regularly. This is called the distribution yield. QABA has a distribution yield of approximately 2.37%. This means the fund paid out cash relative to its share price. These distributions usually happen quarterly, and over the last 12 months, there were four payouts. It is important to remember that a distribution yield tells you about cash payments, but it is not the same thing as your total return.
NAV erosion explanation
"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases significantly over time. Some investors worry that high cash payments might cause this. However, for QABA, the erosion-risk score is 100, and the label shows "No price erosion detected." There is no severe erosion-risk flag for this fund.
Top Holdings
The following are the top holdings in this fund (note that this list is partial):
• Wintrust Financial Corp (4.01%)
• Commerce Bancshares Inc (3.28%)
• Central Bancompany Inc Class A (3.12%)
• United Bankshares Inc (2.60%)
• Hancock Whitney Corp (2.42%)
• Bank OZK (2.10%)
• Eastern Bankshares Inc (2.00%)
• TFS Financial Corp (1.92%)
• First Financial Bankshares Inc (1.90%)
• Fulton Financial Corp (1.80%)
Pros
• The fund has shown positive price returns and total returns over the one-year and three-year periods.
• The erosion-risk measurement is rated as "good."
Cons
• Because this fund focuses on community banks, its performance is tied specifically to that sector.
Beginner takeaway
When studying QABA, notice the difference between the share price movement and the total return. The total return is higher because it includes the cash distributions paid to investors. Always look at both numbers to see the full picture of how a fund has performed.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | WINTRUST FINANCIAL CORP | WTFC | 4.01% |
| 2 | COMMERCE BANCSHARES INC | CBSH | 3.28% |
| 3 | CENTRAL BANCOMPANY INC CLASS A | CBC | 3.12% |
| 4 | UNITED BANKSHARES INC | UBSI | 2.60% |
| 5 | HANCOCK WHITNEY CORP | HWC | 2.42% |
| 6 | BANK OZK | OZK | 2.10% |
| 7 | EASTERN BANKSHARES INC ORDINARY SHARES | EBC | 2.00% |
| 8 | TFS FINANCIAL CORP | TFSL | 1.92% |
| 9 | FIRST FINANCIAL BANKSHARES INC | FFIN | 1.90% |
| 10 | FULTON FINANCIAL CORP | FULT | 1.80% |