Designed to provide broad exposure to the Energy - Natural Gas segment of the equity market, the First Trust Natural Gas ETF (FCG Quick QuoteFCG - Free Report) is a passively managed exchange traded fund launched on May 8, 2007.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 - Natural Gas is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.

Index Details

The fund is sponsored by First Trust Advisors. It has amassed assets over $486.92 million, making it one of the larger ETFs attempting to match the performance of the Energy - Natural Gas segment of the equity market. FCG seeks to match the performance of the ISE-REVERE Natural Gas Index before fees and expenses.

The ISE-Revere Natural Gas Index is an equal-weighted index comprised of exchange-listed companies that derive a substantial portion of their revenues from the exploration and production of natural gas.

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 0.57%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.73%.

Sector Exposure and Top Holdings

ETFs offer a 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.

This ETF has heaviest allocation in the Energy sector -- about 97.3% of the portfolio.

Looking at individual holdings, Conocophillips (COP) accounts for about 5.01% of total assets, followed by Hess Midstream Lp (class A) (HESM) and Occidental Petroleum Corporation (OXY).

The top 10 holdings account for about 44.47% of total assets under management.

Performance and Risk

The ETF has added roughly 4.66% and is down about 4.91% so far this year and in the past one year (as of 01/26/2026), respectively. FCG has traded between $19.37 and $25.96 during this last 52-week period.

The ETF has a beta of 0.65 and standard deviation of 27.18% for the trailing three-year period, making it a high risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.

Alternatives

First Trust Natural 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. FCG, then, is not a great choice for investors seeking exposure to the Energy ETFs segment of the market. Instead, there are better ETFs in the space to consider.

Global X U.S. Natural Gas ETF (LNGX) tracks GLOBAL X U.S. NATURAL GAS INDEX. The fund has $8.97 million in assets. LNGX has an expense ratio of 0.45%.

Bottom Line

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