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Should You Invest in the First Trust NASDAQ Oil & Gas ETF (FTXN)?
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If you're interested in broad exposure to the Energy - Broad segment of the equity market, look no further than the First Trust NASDAQ Oil & Gas ETF (FTXN - Free Report) , a passively managed exchange traded fund launched on 09/20/2016.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.15 billion, making it one of the larger 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
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 2.38%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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, Pbf Energy Inc. (PBF - Free Report) accounts for about 9% of 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 lost about -4.90% and is up roughly 30.75% so far this year and in the past one year (as of 01/05/2023), respectively. FTXN has traded between $21.05 and $31.70 during this last 52-week period.
The ETF has a beta of 1.43 and standard deviation of 45.53% for the trailing three-year period. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Oil & Gas ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FTXN is a great option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that 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 $8.31 billion in assets, Energy Select Sector SPDR ETF has $39.35 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)?
If you're interested in broad exposure to the Energy - Broad segment of the equity market, look no further than the First Trust NASDAQ Oil & Gas ETF (FTXN - Free Report) , a passively managed exchange traded fund launched on 09/20/2016.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.15 billion, making it one of the larger 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
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 2.38%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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, Pbf Energy Inc. (PBF - Free Report) accounts for about 9% of 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 lost about -4.90% and is up roughly 30.75% so far this year and in the past one year (as of 01/05/2023), respectively. FTXN has traded between $21.05 and $31.70 during this last 52-week period.
The ETF has a beta of 1.43 and standard deviation of 45.53% for the trailing three-year period. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ Oil & Gas ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FTXN is a great option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that 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 $8.31 billion in assets, Energy Select Sector SPDR ETF has $39.35 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.