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Is First Trust NASDAQ Oil & Gas ETF (FTXN) a Strong ETF Right Now?
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Making its debut on 09/20/2016, smart beta exchange traded fund First Trust NASDAQ Oil & Gas ETF (FTXN - Free Report) provides investors broad exposure to the Energy 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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.24 billion, making it one of the larger ETFs in the Energy ETFs. FTXN, before fees and expenses, seeks to match the performance of the Nasdaq US Smart Oil & Gas Index.
The Nasdaq US Smart Oil & Gas Index is a modified factor weighted index, designed to provide exposure to US companies within the oil and gas industry.
Cost & Other Expenses
Cost 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%.
FTXN's 12-month trailing dividend yield is 1.51%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
FTXN's heaviest allocation is in the Energy sector, which is about 100% of the portfolio.
Taking into account individual holdings, Pbf Energy Inc. (PBF - Free Report) accounts for about 9% of the fund's total assets, followed by Occidental Petroleum Corporation (OXY - Free Report) and Chevron Corporation (CVX - Free Report) .
The top 10 holdings account for about 56.69% of total assets under management.
Performance and Risk
The ETF has gained about 52.36% so far this year and it's up approximately 46.13% in the last one year (as of 11/01/2022). In the past 52-week period, it has traded between $18.42 and $31.70.
The ETF has a beta of 1.42 and standard deviation of 44.92% for the trailing three-year period. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Oil & Gas ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Energy ETF (VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $8.70 billion in assets, Energy Select Sector SPDR ETF has $42.78 billion. VDE has an expense ratio of 0.10% and XLE charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Energy ETFs.
Bottom Line
To 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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Is First Trust NASDAQ Oil & Gas ETF (FTXN) a Strong ETF Right Now?
Making its debut on 09/20/2016, smart beta exchange traded fund First Trust NASDAQ Oil & Gas ETF (FTXN - Free Report) provides investors broad exposure to the Energy 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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.24 billion, making it one of the larger ETFs in the Energy ETFs. FTXN, before fees and expenses, seeks to match the performance of the Nasdaq US Smart Oil & Gas Index.
The Nasdaq US Smart Oil & Gas Index is a modified factor weighted index, designed to provide exposure to US companies within the oil and gas industry.
Cost & Other Expenses
Cost 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%.
FTXN's 12-month trailing dividend yield is 1.51%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
FTXN's heaviest allocation is in the Energy sector, which is about 100% of the portfolio.
Taking into account individual holdings, Pbf Energy Inc. (PBF - Free Report) accounts for about 9% of the fund's total assets, followed by Occidental Petroleum Corporation (OXY - Free Report) and Chevron Corporation (CVX - Free Report) .
The top 10 holdings account for about 56.69% of total assets under management.
Performance and Risk
The ETF has gained about 52.36% so far this year and it's up approximately 46.13% in the last one year (as of 11/01/2022). In the past 52-week period, it has traded between $18.42 and $31.70.
The ETF has a beta of 1.42 and standard deviation of 44.92% for the trailing three-year period. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Oil & Gas ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Energy ETF (VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $8.70 billion in assets, Energy Select Sector SPDR ETF has $42.78 billion. VDE has an expense ratio of 0.10% and XLE charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Energy ETFs.
Bottom Line
To 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.