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Should You Invest in the First Trust NASDAQ Oil & Gas ETF (FTXN)?
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Designed to provide broad exposure to the Energy - Broad segment of the equity market, the First Trust NASDAQ Oil & Gas ETF (FTXN - Free Report) is a passively managed exchange traded fund launched on 09/20/2016.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 16, placing it in bottom 0%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $212.51 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. FTXN seeks to match the performance of the Nasdaq US Smart Oil & Gas Index before fees and expenses.
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.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.59%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 100% of the portfolio.
Looking at individual holdings, Conocophillips (COP - Free Report) accounts for about 8.05% of total assets, followed by Chevron Corporation (CVX - Free Report) and Exxon Mobil Corporation (XOM - Free Report) .
The top 10 holdings account for about 57.58% of total assets under management.
Performance and Risk
The ETF has lost about -4.87% so far this year and is down about -1.98% in the last one year (as of 01/18/2024). In that past 52-week period, it has traded between $24.83 and $31.02.
The ETF has a beta of 1.30 and standard deviation of 34.07% for the trailing three-year period. With about 43 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Oil & Gas ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FTXN, then, is not the best option for investors seeking exposure to the Energy ETFs segment of the market. However, there are better ETFs in the space to consider.
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 $7.55 billion in assets, Energy Select Sector SPDR ETF has $34.17 billion. VDE has an expense ratio of 0.10% and XLE charges 0.10%.
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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Should You Invest in the First Trust NASDAQ Oil & Gas ETF (FTXN)?
Designed to provide broad exposure to the Energy - Broad segment of the equity market, the First Trust NASDAQ Oil & Gas ETF (FTXN - Free Report) is a passively managed exchange traded fund launched on 09/20/2016.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 16, placing it in bottom 0%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $212.51 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. FTXN seeks to match the performance of the Nasdaq US Smart Oil & Gas Index before fees and expenses.
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.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.59%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 100% of the portfolio.
Looking at individual holdings, Conocophillips (COP - Free Report) accounts for about 8.05% of total assets, followed by Chevron Corporation (CVX - Free Report) and Exxon Mobil Corporation (XOM - Free Report) .
The top 10 holdings account for about 57.58% of total assets under management.
Performance and Risk
The ETF has lost about -4.87% so far this year and is down about -1.98% in the last one year (as of 01/18/2024). In that past 52-week period, it has traded between $24.83 and $31.02.
The ETF has a beta of 1.30 and standard deviation of 34.07% for the trailing three-year period. With about 43 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Oil & Gas ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FTXN, then, is not the best option for investors seeking exposure to the Energy ETFs segment of the market. However, there are better ETFs in the space to consider.
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 $7.55 billion in assets, Energy Select Sector SPDR ETF has $34.17 billion. VDE has an expense ratio of 0.10% and XLE charges 0.10%.
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.