First Trust NASDAQ ABA Community Bank Index Fund

First Trust NASDAQ ABA Community Bank Index Fund (QABA) tracks an index of smaller US community banks listed on Nasdaq. Nasdaq and the American Bankers Association built the index, and it leaves out the 50 largest banks. That makes QABA a narrower bet on local lenders than broad bank funds. It also costs more: 0.60% a year, compared with 0.35% for SPDR S&P Regional Banking ETF (KRE).

• Over the year to Oct 27, 2026, QABA returned +24.9%, 2nd of 6 among similar funds.
• Its 5-year annualized return was +5.7% and its 10-year +7.3%.
• In the 2020 COVID crash it fell 42.8% and regained its old high 9.5 months after the low.
• Its worst full calendar year was 2018 (-16.5%); its best was 2013 (+43.5%).
• The deepest fall in its price history was 49.3% (Jun 8, 2018 to Mar 23, 2020), recovered by Feb 24, 2021.

As of Jun 30, 2026, the fund held 161 securities; the ten largest made up 25.94% of assets.

• Over the three months to Jun 30, 2026, investors added a net $3.2M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +5.92%, +1.10%, +8.48%.

QABA aims to match the Nasdaq OMX ABA Community Bank Index, before fees. Nasdaq and the American Bankers Association (ABA) developed the index and own it jointly. The fund normally keeps at least 90% of its net assets in the index's stocks. The starting pool is banks, thrifts (savings institutions) and their holding companies listed on the Nasdaq Stock Market. The index then removes the 50 largest banks by asset size, using FDIC call reports, which are the financial filings banks send to regulators. It also removes banks that focus on international business or credit cards. The stocks that remain must pass size and trading tests. As of March 31, 2026, the index held 149 securities.

Holdings are weighted by market capitalization, meaning a company's total stock market value, with caps on the largest. If one stock goes above 25%, or stocks above 5% together go above 50%, the biggest are trimmed to 8% and the rest to 4%. The extra weight is spread across the other stocks. As of June 30, 2026, the largest holding, Wintrust Financial, was about 4.4%.

The index is rebalanced every quarter and fully reviewed twice a year, and the fund makes the same changes shortly after. The April 30, 2026 prospectus lists portfolio turnover of 20%. The fund simply owns the shares. It uses no leverage, options or swaps.

• QABA charges 0.6% a year, versus an average of 0.38% for the similar funds below (5th of 6, cheapest first).
• Of that, 0.4% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.03% waiver from the adviser, which may end.

QABA holds a single industry, small community banks, and has had steep, slow-to-recover losses, so it fits better as a small side position than as a foundation.

QABA gives a targeted position in small and midsize US banks. As of October 27, 2026, its trailing yield was 2.3%, paid quarterly. Its 0.60% cost is well above the 0.38% average of similar funds. Downturns have been harsh. The fund fell 42.8% in the 2020 COVID crash and took about 9.5 months to recover. In 2022 it dropped 23.1% and needed about 29 months to recover. Its deepest decline was 49.3%, from June 2018 to March 2020, and it didn't fully recover until February 2021. Its worst calendar year was 2018, at −16.1%. Someone who has to sell shares for spending money in a bad year could lock in large losses. The fund launched in 2009, so it has no 2008 record. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).