The First Trust Natural Gas ETF (FCG Quick QuoteFCG - Free Report) made its debut on 05/08/2007, and is a smart beta exchange traded fund that provides broad exposure to the Energy ETFs category of the market.

What Are Smart Beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

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.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

The fund is managed by First Trust Advisors, and has been able to amass over $618.94 million, which makes it one of the larger ETFs in the Energy ETFs. Before fees and expenses, this particular fund seeks to match the performance of the ISE-REVERE Natural Gas Index.

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.

Cost & Other Expenses

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Operating expenses on an annual basis are 0.59% for this ETF, which makes it on par with most peer products in the space.

It's 12-month trailing dividend yield comes in at 2.27%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Representing 97.7% of the portfolio, the fund has heaviest allocation to the Energy sector.

Taking into account individual holdings, Devon Energy Corporation (DVN) accounts for about 8.11% of the fund's total assets, followed by Eog Resources, Inc. (EOG) and Western Midstream Partners Lp (WES).

The top 10 holdings account for about 47.17% of total assets under management.

Performance and Risk

So far this year, FCG has added roughly 20.75%, and is up about 22.04% in the last one year (as of 07/28/2026). During this past 52-week period, the fund has traded between $21.95 and $32.74.

The fund has a beta of 0.45 and standard deviation of 26.89% for the trailing three-year period, which makes FCG a high risk choice in this particular space. With about 40 holdings, it has more concentrated exposure than peers .

Alternatives

First Trust Natural Gas ETF is not a suitable option for investors seeking to outperform the Energy ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.

Global X U.S. Natural Gas ETF(LNGX) tracks GLOBAL X U.S. NATURAL GAS INDEX The fund has $46.51 million in assets. LNGX has an expense ratio of 0.45%.

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.