First Trust Dow Jones Internet Index Fund Slumps 9.85% YTD as Asset-Heavy Sectors Surge
First Trust Dow Jones Internet Index Fund has tumbled 9.85% year to date while energy, materials and industrial ETFs gained 19.8%, 14.98% and 11.3% respectively. Investors are favoring asset-heavy sectors with lower AI labor-cost exposure over asset-light internet and software funds.
1. Performance Overview
The First Trust Dow Jones Internet Index Fund (FDN) has declined 9.85% year to date, contrasting with gains of 19.8% in energy, 14.98% in materials and 11.3% in industrial ETFs through February 25.
2. AI Labor-Cost Exposure
Goldman Sachs’ analysis shows firms with high labor-cost-to-revenue ratios, like asset-light internet companies, face greater margin risk from AI-driven automation, while asset-heavy industries benefit from lower relative wage exposure.
3. Asset-Light versus Asset-Heavy Trends
Asset-heavy sectors requiring physical capital—energy rigs, mines and manufacturing infrastructure—have outperformed asset-light, service-oriented industries as investors rotate into lower-automation-risk businesses.
4. Implications for FDN
If the divergence persists, FDN may continue underperforming broader markets until internet companies either reduce labor exposure or demonstrate sustainable margin improvements despite AI adoption.