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Is First Trust NASDAQ Oil & Gas ETF (FTXN) a Strong ETF Right Now?
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The First Trust NASDAQ Oil & Gas ETF (FTXN - Free Report) was launched on 09/20/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 $1.16 billion, making it one of the larger ETFs in the Energy ETFs. Before fees and expenses, this particular fund 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
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.
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 1.57%.
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 100% of the portfolio, the fund has heaviest allocation to the Energy sector.
Taking into account individual holdings, Pbf Energy Inc. (PBF - Free Report) accounts for about 8.86% of the fund's total assets, followed by Occidental Petroleum Corporation (OXY - Free Report) and Marathon Oil Corporation (MRO - Free Report) .
FTXN's top 10 holdings account for about 56.42% of its total assets under management.
Performance and Risk
The ETF has added roughly 39.07% and is up about 70.88% so far this year and in the past one year (as of 08/31/2022), respectively. FTXN has traded between $16.29 and $31.70 during this last 52-week period.
The ETF has a beta of 1.48 and standard deviation of 44.19% 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 $7.96 billion in assets, Energy Select Sector SPDR ETF has $37.91 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?
The First Trust NASDAQ Oil & Gas ETF (FTXN - Free Report) was launched on 09/20/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Energy ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 $1.16 billion, making it one of the larger ETFs in the Energy ETFs. Before fees and expenses, this particular fund 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
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.
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 1.57%.
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 100% of the portfolio, the fund has heaviest allocation to the Energy sector.
Taking into account individual holdings, Pbf Energy Inc. (PBF - Free Report) accounts for about 8.86% of the fund's total assets, followed by Occidental Petroleum Corporation (OXY - Free Report) and Marathon Oil Corporation (MRO - Free Report) .
FTXN's top 10 holdings account for about 56.42% of its total assets under management.
Performance and Risk
The ETF has added roughly 39.07% and is up about 70.88% so far this year and in the past one year (as of 08/31/2022), respectively. FTXN has traded between $16.29 and $31.70 during this last 52-week period.
The ETF has a beta of 1.48 and standard deviation of 44.19% 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 $7.96 billion in assets, Energy Select Sector SPDR ETF has $37.91 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.